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INFORMATION MEMORANDUM
GREENLAM INDUSTRIES LIMITED
(Incorporated under the Companies Act, 1956 on 12 August 2013)
Registered Office: Makum Road, Tinsukia, Assam – 786125
Telephone: 0374-2352353; Fax: 0374-2338233
Company Secretary and Compliance Officer: Mr. Prakash Kumar Biswal
Email: [email protected]
website: www.greenlam.com
PROMOTER: MR. SAURABH MITTAL
INFORMATION MEMORANDUM FOR LISTING 24,136,374 EQUITY SHARES OF RS. 5 (INDIAN
RUPEES FIVE ONLY) EACH
NO EQUITY SHARES ARE PROPOSED TO BE SOLD OR OFFERED PURSUANT TO THIS
INFORMATION MEMORANDUM
GENERAL RISK
Investments in equity and equity related securities involve a degree of risk and investors should not invest in the
equity shares of Greenlam Industries Limited, unless they can afford to take the risk of losing their investment.
Investors are advised to read the Risk Factors carefully before taking an investment decision in the shares of
Greenlam Industries Limited. For taking an investment decision, investors must rely on their own examination
of the Company including the risks involved.
ABSOLUTE RESPONSIBILITY OF GREENLAM INDUSTRIES LIMITED
Greenlam Industries Limited, having made all reasonable inquiries, accepts responsibility for, and confirms that
this Information Memorandum contains all information with regard to Greenlam Industries Limited, which is
material, that the information contained in this Information Memorandum is true and correct in all material
aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are
honestly held and that there are no other facts, the omission of which makes this Information Memorandum as a
whole or any of such Information or the expression of any such opinions or intentions misleading in any
material respect.
LISTING
The Equity Shares of Greenlam Industries Limited are proposed to be listed on the BSE Limited (BSE) and the
National Stock Exchange of India Limited (NSE).
Our Company has submitted this Information Memorandum with BSE and NSE and the same has been made
available on our Company‘s website viz. www.greenlam.com. The Information Memorandum would also be
made available on the website of BSE (www.bseindia.com) and NSE (www.nseindia.com).
REGISTRAR AND SHARE TRANSFER AGENTS
Link Intime India Private Limited,
44, Community Centre, Phase-I, Near PVR, Naraina Ind. Area,
New Delhi-110028,
Phone: +91 11 4141 0592; Fax: +91 11 4141 0591,
E-mail: [email protected]
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TABLE OF CONTENTS
SECTION I - GENERAL ..................................................................................................................... 3
I. DEFINITION, ABBREVIATIONS AND INDUSTRY RELATED TERMS ......................................... 3
II. CERTAIN CONVENTIONS AND USE OF MARKET DATA ........................................................... 6
III. FORWARD LOOKING STATEMENTS ......................................................................................... 7
IV. CURRENCY OF PRESENTATION ................................................................................................ 8
SECTION II – RISK FACTORS ......................................................................................................... 9
V. RISK FACTORS .......................................................................................................................... 9
SECTION III – INTRODUCTION ................................................................................................... 19
VI. SUMMARY OF INDUSTRY ........................................................................................................ 19
VII. SUMMARY OF BUSINESS ......................................................................................................... 20
VIII. SUMMARY OF FINANCIAL INFORMATION ............................................................................. 21
IX. COMPOSITE SCHEME OF ARRANGEMENT ............................................................................. 22
X. GENERAL INFORMATION ....................................................................................................... 28
XI. CAPITAL STRUCTURE ............................................................................................................. 31
XII. STATEMENT OF POSSIBLE DIRECT TAX BENEFITS .............................................................. 41
SECTION IV – ABOUT US ................................................................................................................ 51
XIII. HISTORY OF OUR COMPANY AND CERTAIN CORPORATE MATTERS ................................. 51
XIV. INDUSTRY OVERVIEW ............................................................................................................ 57
XV. BUSINESS OVERVIEW ............................................................................................................. 61
XVI. OUR MANAGEMENT ............................................................................................................... 68
XVII. PROMOTER AND GROUP COMPANIES ................................................................................... 83
XVIII. DIVIDEND AND DIVIDEND POLICY ......................................................................................... 93
SECTION V – FINANCIAL STATEMENTS .................................................................................. 94
XIX. FINANCIAL STATEMENT OF THE COMPANY ......................................................................... 94
XX. MANAGEMENT DISCUSSION AND ANALYSIS ....................................................................... 117
SECTION VI – LEGAL AND OTHER INFORMATION............................................................. 121
XXI. OUTSTANDING LITIGATIONS, DEFAULTS AND MATERIAL DEVELOPMENTS .................... 121
XXII. GOVERNMENT APPROVALS ................................................................................................. 151
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SECTION VII - REGULATORY AND STATUTORY DISCLOSURES .................................... 152
XXIII. REGULATORY AND OTHER DISCLOSURES .......................................................................... 152
XXIV. ARTICLES OF ASSOCIATION ................................................................................................. 156
SECTION VIII – OTHER INFORMATION .................................................................................. 203
XXV. DOCUMENTS FOR INSPECTION ............................................................................................. 203
XXVI. DECLARATION ...................................................................................................................... 205
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SECTION I - GENERAL
I. DEFINITION, ABBREVIATIONS AND INDUSTRY RELATED TERMS
Unless the context otherwise indicates or implies, the following terms have the following
meanings in this Information Memorandum and references to any statute or regulations or
policies shall include amendments thereto, from time to time:
Term
Description
Appointed Date 1 April 2013.
Articles/Articles of
Association
Articles of Association of the Company.
AGM Annual General Meeting of the Members of our Company
AS Accounting Standards issued by the Institute of Chartered
Accountants of India
Board/Board of
Directors
Board of Directors of the Company.
―Scheme‖ or
―Composite Scheme of
Arrangement‖
Composite Scheme of Arrangement under sections 100 to 104 and
391 to 394 of the Companies Act, 1956 between Greenply
Industries Limited and Greenlam Industries Limited and their
respective shareholders and creditors
BSE BSE Limited
CAGR Compounded Annual Growth Rate
CDSL Central Depository Services (India) Limited
Companies Act shall mean the (Indian) Companies Act 2013 (to the extent notified
by the Government of India and currently in force), and the
(Indian) Companies Act, 1956, to the extent not repealed and
replaced by notified provisions of the (Indian) Companies Act,
2013 and any amendment thereto or any other succeeding
enactment for the time being in force.
Demerged
Undertaking
shall mean and include all property, rights and powers and all
debts, liabilities, duties and obligations of Greenply comprised in
and/or pertaining to the whole business operations of Decorative
Business of Greenply as on the Appointed Date, and as described
in detail in the Composite Scheme of Arrangement.
Decorative Business shall have the meaning ascribed to the term in Chapter IX of
Section III of this Information Memorandum
Depository A body corporate registered under SEBI (Depositories and
Participant) Regulations, 1996
Depositories Act Depositories Act, 1996 as amended from time to time
DP/Depository
Participant
A depository participant as defined under the Depositories Act
4
Director(s) The director(s) on the Board of our Company
EGM Extraordinary General Meeting of the members of our
Company
EPS Earnings Per Share i.e., profit after tax for a fiscal year divided
by the weighted average outstanding number of equity shares at
the end of that fiscal year
Effective Date shall mean 17 November 2014
Equity Share(s) The equity share(s) of our Company with a face value of Rs.
5/- (Rupees Five) each unless otherwise specified in the context
thereof
Financial Year/Fiscal
Year/FY
Any period of twelve months ended March 31, of that
particular year, unless otherwise stated
GAAP Generally Accepted Accounting Principles
Gauhati High Court The Gauhati High Court (the High Court of Assam, Nagaland,
Mizoram and Arunachal Pradesh)
Greenply Greenply Industries Limited, a company incorporated under the
provisions of the Companies Act and having its registered office at
Makum Road, Tinsukia, Assam - 786 125
Greenply Shareholder
Group
includes Mr. Shiv Prakash Mittal, Mr. Rajesh Mittal, Mr. Shobhan
Mittal, Mr. Sanidhya Mittal, Ms. Santosh Mittal, Ms. Karuna
Mittal, Shiv Prakash Mittal (HUF), Rajesh Mittal (HUF), Prime
Holdings Private Limited, S. M. Management Private Limited,
Vanashree Properties Private Limited and M/S Trade Combines
―Greenlam‖ or ―the
Company‖ or ―our
Company‖ or
―Resulting Company‖,
―we‖ or ―us‖
Greenlam Industries Limited, a company incorporated under the
provisions of the Companies Act and having its registered office at
Makum Road, Tinsukia, Assam – 786 125.
Greenlam Shareholder
Group
includes Mr. Shiv Prakash Mittal, Shiv Prakash Mittal (HUF), Ms.
Santosh Mittal, Mr. Saurabh Mittal, Ms. Parul Mittal and Greenply
Leasing & Finance Private Limited
Income Tax Act The Income Tax Act, 1961, as amended from time to time
Listing Agreement Listing agreement to be executed between the Company and the
relevant Stock Exchanges
―MoA‖ or
―Memorandum of
Association‖
Memorandum of Association of the Company.
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Mutual Fund A mutual fund registered with SEBI under the SEBI (Mutual
Funds) Regulations, 1996, as amended from time to time
N.A. not applicable
NSDL National Securities Depository Limited
NSE National Stock Exchange of India Limited
PAN Permanent Account Number allotted under the Income Tax
Act, 1961, as amended from time to time
Promoter Mr. Saurabh Mittal
Promoter Group shall have the same meaning as defined under Regulation 2(zb)
of the ICDR
Record Date shall mean 27 November 2014
Registered Office Makum Road, Tinsukia, Assam – 786125
Retained Undertaking means all the undertakings, businesses, activities, duties, debts,
liabilities, obligations and operations of the Greenply other than
those comprised in the Demerged Undertaking
RoC Registrar of Companies at Shillong
Rs. / Rupees / INR / Indian Rupees
Stock Exchanges NSE and the BSE
SCRR Securities Contracts (Regulation) Rules 1957 as amended from
time to time
SEBI
Regulations/ICDR
SEBI (Issue of Capital and Disclosure Requirements)
Regulations, 2009, as amended from time to time
Stock Exchange(s) The National Stock Exchange of India Limited (NSE) and BSE
Limited (BSE)
6
II. CERTAIN CONVENTIONS AND USE OF MARKET DATA
Unless stated otherwise, the financial data in this Information Memorandum is derived from
the financial statements prepared in accordance with the Indian GAAP. The current financial
year commenced on 12 August 2013 and ended on 31 March 2014. In this Information
Memorandum, any discrepancies in any table between the total and the sums of the amounts
listed are due to rounding off.
For definitions, please see the section ―Definition and Conventional and General Terms‖.
Unless stated otherwise, industry data and market data used throughout this Information
Memorandum has been obtained from the published data and industry publications. Industry
publications generally state that the information contained therein has been obtained from
sources believed to be reliable but that their accuracy and completeness are not guaranteed
and their reliability cannot be assured. Although we believe that industry data used in this
Information Memorandum is reliable, it has not been independently verified. Data from these
sources may also not be comparable. The extent to which industry and market data used in
this Information Memorandum is meaningful depends on the readers‘ familiarity with and
understanding of the methodologies used in compiling such data.
7
III. FORWARD LOOKING STATEMENTS
Certain statements in this Information Memorandum constitute ―forward-looking statements‖.
These forward-looking statements generally can be identified by words or phrases such as
―aim‖, ―anticipate‖, ―believe‖, ―expect‖, ―estimate‖, ―intend‖, ―objective‖, ―plan‖, ―project‖,
―will‖, ―will continue‖, ―will pursue‖ or other words or phrases of similar import. Similarly,
statements that describe our Company‘s strategies, objectives, plans or goals are also forward-
looking statements. All forward-looking statements are subject to risks, uncertainties and
assumptions about us that could cause actual results to differ materially from those
contemplated by the relevant forward-looking statement.
Our forward- looking statements contain information regarding, among other things, our
financial condition, future plans and business strategy. We have based these forward-looking
statements on our current expectations and projections about future events. Although we
believe that these expectations and projections are reasonable, such forward-looking
statements are inherently subject to risks, uncertainties and assumptions, including, among
other things:
General political, social and economic conditions in India and other countries;
Our ability to successfully implement our strategy, our growth and expansion plans
and technological changes;
Strikes or work stoppages by our employees or contractual employees;
Increasing competition in, and the conditions of, the laminates industry;
Failure to undertake projects on commercially favorable terms;
Accidents and natural disasters; and
Other factors beyond our control.
Additional factors that could cause actual results, performance or achievements to differ
materially from those in the forward-looking statements include, but are not limited to, those
discussed under ―Risk Factors‖, ―Business Overview‖ and ―Industry Overview‖. These
forward-looking statements speak only as at the date of this Information Memorandum. The
Company expressly disclaims any obligation or undertaking to release publicly any updates or
revisions to any forward-looking statement contained herein to reflect any changes in the
Company‘s expectations with regard thereto or any change in events, conditions or
circumstances on which any such statements are based.
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IV. CURRENCY OF PRESENTATION
All references to ―India‖ contained in this Information Memorandum are to the Republic of
India. All references to ‗Rupees‖, ―Rs.‖, ―INR‖, ― ‖ are to the Indian Rupees, the official
currency of the Republic of India.
All references to:
―Singapore $‖ are to the official currency of Republic of Singapore;
―GBP‖ are to the official currency of United Kingdom of Great Britain and Northern
Ireland, together with its territories and possessions;
―Thailand baht‖ are to the official currency of the Kingdom of Thailand;
―USD‖ are to United States Dollar, the official currency of the United States of
America;
―IDR‖ are to Indonesian Rupiah, the official currency of the Republic of Indonesia.
Exchange Rates
The Information Memorandum contains conversions of certain other currency amounts into
Indian Rupees that have been presented solely to comply with the SEBI Regulations. These
conversions should not be construed as a representation that these currency amounts could
have been, or can be converted into Indian Rupees, at any particular rate or at all. The
exchange rates of the respective foreign currencies as on March 31, 2012, March 31, 2013,
March 31, 2014 and September 30, 2014 are provided below:
Currency
Exchange Rate
as of 31.03.2012
Exchange Rate
as of 31.03.2013
Exchange Rate
as of 31.03.2014
Exchange
Rate as of
30.09.2014
GBP 81.3156 82.4242 99.7849 100.0451
Singapore $ 40.5131 43.7143 47.5846 48.4058
Thailand Baht 1.6495 1.8524 1.8497 1.90420
USD 50.8763 54.28 59.89 61.79
IDR 0.0055 0.00559 0.00531 0.0051
Source: www.mecklai.com
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SECTION II – RISK FACTORS
V. RISK FACTORS
The risks described below and any additional risks and uncertainties not presently known to
our Company or that are currently deemed immaterial could adversely affect our Company’s
business, financial condition or results of operations and the trading price of our Equity
Shares could decline. Unless specified or quantified in the relevant risk factors below, we are
not in a position to quantify the financial or other implication of any of the risks described in
this section. The numbering of the risk factors has been done to facilitate ease of reading and
reference and does not in any manner indicate the importance of one risk over another.
INTERNAL RISK FACTORS
RISK RELATING TO THE COMPANY’S BUSINESS
1. Our growth and our financial results may be affected by factors influencing the demand
for our products.
Our financial results are influenced by the macroeconomic factors determining the growth of
the Indian economy as a whole and real estate sector in particular. The interior infrastructure
sector is influenced by a growth in disposable income. A buoyant economy and rising per
capita income and easy availability of housing finance drive urbanization, fuelling growth in
housing and creating room for the interior infrastructure. The demand for interior
infrastructure products is primarily dependent on the demand for real estate which influences
the demand for laminates, decorative veneers, compact laminates and allied products.
Periods of slowdown in the economic growth of India has significantly affected the real estate
sector in the recent past. Any further downturn in the real estate industry and/or changes in
governmental policies affecting the growth of this sector may have an adverse effect on the
demand for laminates and other interior infrastructure products and the results of our
operations.
2. If we are unable to implement our growth strategies in a timely manner, our business,
financial condition and results of operations could be adversely affected.
As part of our growth strategy, we have made and will continue to make substantial
investment in new production capacities. We have continuously launched new products and
finishes and expanded the brand to economy products as well.
Our success will depend, among other things, on our ability to source the required financing,
assessment of potential markets, timing of our capital investments, the quantum of input
costs, ability to attract new customers in India and abroad, the ability to maintain and enhance
our position in India and overseas and the ability to maintain adequate operational and
financial controls. Continuous expansion increases the challenges involved in financial
management, recruitment, training and retaining high quality human resources, preserving our
culture, values and entrepreneurial environment, and developing and improving our internal
administrative infrastructure. Our growth strategy may expose us to risks and uncertainties
which may be beyond our control and accordingly, there can be no assurance that we will be
able to complete our plans on schedule or without incurring additional expenditure or at all. If
the market conditions deteriorate and/or if operations do not generate sufficient funds or for
any other reasons we are compelled to delay, modify or forego some or all aspects of our
growth strategies our future results of operations may be affected.
3. We can provide no assurance that our new products will be commercially successful.
10
The Company has introduced new value added products viz., high-end engineered wood
flooring and pre-laminated particle board. Whether our new products will be accepted by and
be successful in the market and whether we would be able to recoup the costs of
manufacturing such new products cannot be assured. For various reasons, the success of our
new products cannot be predicted with a reasonable certainty. There can be no guarantee that
we will be able to succeed in new products in a timely manner or at all and that the products
we introduced will be accepted in the market or that such acceptance will continue for any
period of time. Failure to generate revenue from new products and/or the ability to maintain
the quality and durability of our products and/or to maintain top-of-the-mind recall for our
brands might weaken our product portfolio, negatively impact our brand, adversely affect our
reputation and result in loss of our market share to our competitors.
4. Any unauthorized use of our trademarks could affect our business and may affect our
reputation.
We believe that our brands and in particular ―Greenlam‖, ―New Mika‖ and ―Green
Decowood‖ have created a niche for themselves in the market. The products marketed under
these brand names hold substantial goodwill and unauthorized usage of any of our brands
would cause our business to suffer and may affect our market reputation.
5. The decrease in or removal of government incentives relating to exports, customs duties,
excise duties, sales tax, value added tax, income tax and other taxes, duties or surcharges
may have a material adverse effect on our profitability.
Taxes and other levies imposed by the Central or State Governments in India that affect the
industry we operate include customs duties, excise duties, sales tax, value added tax, income
tax and other taxes, duties or surcharges introduced on a permanent or temporary basis from
time to time. Currently we benefit from certain tax incentives resulting in a decrease in the
effective tax rate compared to the tax rates that we would have applied if these incentives had
not been available. The laminate unit located at Nalagarh enjoys excise exemption for 10 (ten)
years. Further, the said unit is entitled to 100% income tax exemption for 5 (five) years
starting from FY 2010 and partial income tax exemption, to the extent of 30% (thirty percent),
for 5 (five) years starting from FY 2015.
There can be no assurance that these tax incentives will continue in the future. The non-
availability of these tax incentives could adversely affect our financial condition and results of
operations. Any new taxes/changes in existing tax policies by the Government of India or
other State Governments may have a material adverse effect on our business, financial
condition and results of operations.
6. Material changes in the regulations that govern us could affect our business, financial
conditions and results of operation.
Our manufacturing activities are subject to environmental laws and regulations promulgated
by the Ministry of Environment and Forests, Government of India and State Pollution Control
Board among other laws which regulate discharge of effluents, polluted emissions, hazardous
substances and so on.
Many of these laws and regulations provide for substantial fines and potential criminal actions
for any violations and require the installation of costly pollution control equipment or
operational changes to limit pollution emissions and/or reduce the likelihood or impact of
hazardous substance releases. In some cases, compliance with environmental, health and
safety laws and regulations might only be achievable by significant capital expenditures, such
as the installation of pollution control equipment. We cannot accurately predict future
11
developments, such as increasingly strict environmental laws or regulations and inspection
and enforcement policies resulting in higher compliance costs and/or claims or liabilities to
any environmental agency.
7. Costs associated with liability due to defects in our products may adversely affect our
business, results of operations and reputation.
Any defect in our products could affect the demand for our products and could result in
customer claims for damages against us. In defending such claims, we may be exposed to
substantial costs and may be subject to adverse publicity.
8. If we are unable to negotiate favourable credit terms from our suppliers, our results of
operations would be adversely affected.
While we have maintained a long term relationship with many of our suppliers and we have
been able to negotiate favourable credit terms from them due to increased order sizes and
timely payments, we cannot assure you that we shall be able to maintain such favourable
credit terms in future. Although we have long term relationship with our suppliers, we do not
have a formal written agreement with any of them. We get longer credit periods based on our
relationship with the suppliers established over a period of time primarily because of
continuity of orders placed with them, size of the order and timely payments made to
suppliers.
9. As a manufacturing business, our success depends on the smooth supply and
transportation of our products from our plants to our distributors and customers. Supply
and transportation are subject to various uncertainties and risks, and delays in delivery or
delivery of non-conforming shipments may result in rejected or discounted deliveries.
We depend on sea-borne freight, rail and road based transportation to deliver our products
from our manufacturing facilities to our customers. We rely on third parties to provide such
services. Disruptions of transportation services because of weather-related problems, strikes,
lock-outs, inadequacies in road infrastructure and port facilities or other events could impair
our ability to supply our products to our customers. There is no assurance that such
disruptions will not occur again in the future. Any such disruptions could have material
adverse effect on our business, financial condition and results of operations. Further, in the
case of a delayed shipment, the customer would have the right to reject the shipment or
demand significant pricing discounts. Non-conforming shipments could also give rise to order
rejections, discounts or other claims.
10. We may not successfully market our products outside India.
Our overseas subsidiaries are in the business of marketing high-pressure laminates in
European Union, Middle-East, South-East Asia, USA etc. and we are in the process of
expanding our presence in the said regions. However, we cannot assure you that our above
stated business ventures would be successful.
11. Any disruption in our manufacturing facilities caused due to labour unrest or natural
disasters may affect our results of operations.
Our manufacturing facilities are subject to operating risks, such as the breakdown or failure of
equipment, power supply or processes, performance below expected levels of output or
efficiency, obsolescence, labour disputes, strikes, lock-outs, continued availability of services
of external contractors, industrial accidents, earthquakes, and other natural disasters. We also
need to comply with the directives of relevant government authorities. We cannot assure you
that our insurance coverage may be adequate should any or all of the aforesaid contingencies
12
actually occur. The occurrence of any or all of these could significantly affect our operating
results.
12. We are subject to fast-growing resource costs and non-commensurate increase in end-
product realisation.
We are strongly focused on tightening operational efficiencies to control operating costs. Any
inability on our part to improve or maintain the operating margins, decrease the raw material
costs and lower the cost of production might reduce our margins and thereby adversely affect
our business, financial condition and results of operations.
13. Our success depends largely on our senior management and skilled manpower and our
ability to attract and retain our key personnel.
Our success depends on the continued services and performance of the members of the
management team and other key employees. If one or more members of our senior
management team were unable or unwilling to continue in their present positions, those
persons could be difficult to replace and our business could be adversely affected. Attracting
and retaining scarce top quality managerial talent has become a serious challenge for
companies in India. A shortage of skilled manpower might affect our business by hampering
the product process and narrowing down the profitability. As such, any loss of the senior
management personnel or key employees could adversely affect our business, results of
operations and financial condition.
14. Any polarisation in labour relations may subject us to industrial unrest, slowdowns, and
increased wage costs.
India has stringent labour legislations that protect the interests of workers, including
legislations that set forth detailed procedures for the establishment of unions, dispute
resolution and employee removal and legislation that imposes certain financial obligations on
employers upon retrenchment. Our Behror and Nalagarh unit workers have created union in
respect of the said units to safeguard their interests. Although, we currently have harmonious
relations with all our employees, there can be no assurance that we will continue to have such
relations. If our relations with the employees are strained, our business may be adversely
affected.
15. Certain loans which our Company has availed of contain undertakings, conditions and
restrictive covenants which could restrict our ability to conduct business and operations.
The agreements governing certain of our debt obligations include terms that require us to,
inter alia take prior approval of our lenders for undertaking any merger, demerger, pledge,
lien, consolidation, reorganization, dissolution, amendment or modification of our charter
documents, pass a resolution of voluntary winding up and approach capital markets
mobilizing additional resources either in the form of debt or equity. Failure to comply with
the terms of our debt agreements or obtain waivers thereunder could result in the accelerated
repayment of some or all of the debt, as well as the cross-acceleration of other debt, and
payment of penal interest, which could adversely affect our liquidity, restrict our expansion
plans and materially and adversely affect our business and results of operations and financial
conditions. Moreover, the guarantees provided by us in respect of the facilities availed by our
overseas subsidiaries from various banks / financial lenders may be invoked by such lenders
on demand.
16. We require certain approvals and licenses in the ordinary course of business and the
failure to obtain or retain them in a timely manner may adversely affect our operations.
13
We require certain statutory and regulatory permits, licenses and approvals in the ordinary
course of our business. We have applied for renewals of certain expired statutory approvals,
including approvals under the Air (Prevention and Control of Pollution) Act, 1981, the Water
(Prevention and Control of Pollution) Act, 1974 and Hazardous Waste (Management,
Handling and Transboundary Movement) Rules, 2008. Furthermore, our statutory approvals
and licenses are subject to numerous conditions, some of which are onerous and require us to
undertake substantial compliance-related expenditure including, submission of compliance
reports, inspection of facilities, compliance with emission and waste disposal norms.
While we have applied for such renewals, we cannot assure that we will receive these
renewals within the required time.
17. We have entered into, and will enter into, related party transactions.
We have entered into, and will enter into, transactions with related parties, including our
Promoter, Directors, subsidiaries and group companies. While we believe that in the past all
such transactions have been conducted on an arm‘s length basis, there can be no assurance
that we could not have achieved more favourable terms had such transactions been entered
into with unrelated parties.
18. Our ability to pay dividends in the future will depend upon future earnings, financial
condition, cash flows, working capital requirements and capital expenditures and the terms
of its financing arrangements.
The amount of dividend payments, if any, will depend upon our future earnings, financial
condition, cash flows, working capital requirements and capital expenditures. There can be no
assurance that we will be able to pay dividend in the foreseeable future. Additionally, we are
restricted by the terms of our debt financing from making dividend payments in the event our
Company makes a default in any of the repayment installments.
19. Our contingent liabilities could adversely affect our financial condition.
Our contingent liabilities would include the contingent liabilities of our Company and
corporate guarantees issued to the lenders on behalf of our subsidiaries. If any of these
contingent liabilities were to materialise our financial condition could be adversely affected.
20. We are involved in legal proceedings which, if determined against us, could affect our
business and financial conditions.
We are party to various legal proceedings. No assurances can be given as to whether these
matters will be settled in our favour or against us. If a claim is determined against us and we
are required to pay all or a portion of the disputed amount, it could have an adverse effect on
our results of operations and cash flows. For further details, please refer to the section titled
―Outstanding Litigations, Defaults and Material Developments‖ of this Information
Memorandum.
21. We do not own the premises where our registered office, our branch offices are located and
in the event our rights over the property are not renewed or is revoked or is renewed on
terms less favourable to us, our business activities may be disrupted.
At present we do not own the premises that we use as our registered office and our branch
offices. In the event the owner of the premises revokes the consent granted to us or fails to
renew the tenancy, we may suffer disruption in our operations. If the terms of the lease are
violated by us or if we are unable to renew the leases prior to the expiry of the term thereof on
terms and conditions favourable to us, we may suffer a disruption in our operations.
14
22. A strong US Dollar and Euro might narrow down our profit margins.
Our Company imports majority of its raw materials. We have a natural hedge in the form of
dollar exports. In the recent past, the US Dollar and the Euro exchange rate has been a strong
performer in the exchange rate scenario. A strong US Dollar and Euro exchange rate has
increased the cost of our raw materials and has dented our profitability to that extent. We
import part of our raw materials on credit terms varying between 0-180 days. Increase in US
Dollar and Euro exchange rates between the time of arrival of material at manufacturing units
and payment to creditors has led to substantial losses in the past. Any further increase in the
US Dollar and the Euro exchange rate may have an adverse effect on our financial condition
and results of operations.
23. Our business is highly dependent on information technology for efficient supply chain
management. Inefficient supply chain management by us or third parties may affect our
business and results of our operations.
Our Company relies on our information technology systems in managing our supply chain,
logistics and other integral part of our business. However, if timely and adequate supplies of
raw materials on acceptable commercial terms are not available to us, or if there are
significant increases in the costs of these materials, then our margins, result of operations and
financial conditions may be adversely affected.
24. Future growth may depend on raising capital and/or loan or lease finance.
Our Company may need to raise additional capital or loan finance in future. Failure to do so
on acceptable terms could impact our growth plans. Restrictive covenants in loans or lease
documents could affect our business operations.
25. Our Company is in the process of receiving lenders’ approvals in respect of realignment of
credit facilities availed.
Pursuant to the Scheme, the Company is in the process of obtaining no-objection/consent
from all its lenders for realignment of its credit facilities and the security to be created in
respect thereof. In the event the proposal of the Company for realignment of the credit
facilities and the security in respect thereof is not accepted by any lender, then it may impact
the business of the Company.
26. Our Company has obtained property on lease from a group company.
The Company has executed a leave and license agreement with its group company Himalaya
Granites Limited for obtaining on lease a shed situated at Panchalam Village, Melpattai post,
Tindivanam, Tamil Nadu for operating its regional distribution centre. Mr. Saurabh Mittal is a
director on the board of our Company as well as the board of Himalaya Granites Limited. In
the event our rights over the said property are not renewed or is revoked or is renewed on
terms less favourable to us, our business activities may be disrupted.
27. Our Promoter and Promoter Group and directors are interested in our Company to the
extent of their shareholding.
The shareholding of our Promoter and Promoter Group and directors in our Company is
55.00% and 2.76% respectively. To the extent of their respective shareholding in our
Company and also to the extent of any dividend payable to them and other distributions in
respect of the said Equity Shares; our Promoter and directors are interested.
15
28. Some of our Group Companies has incurred losses during the last three years.
Our Group Companies have incurred losses in the recent past as set out in the table below:
Sr.
No.
Name of Group Company Profit/ (Loss) after tax (Rs.)
Fiscal
2014
Fiscal
2013
Fiscal
2012
1. JayJay Agencies Private Limited (70,546) (70,977) (72,488)
2. Prime Properties Private Limited (23,58,571) (36,15,551) 15,98,851
3. Greenlam VT Industries Private Limited (27,184) N.A N.A
4. S.M. Safeinvest Private Limited (19,508) N.A N.A
29. There is no prior trading history of the Equity Shares.
Since the Equity Shares have not been previously traded, their market value is uncertain.
Following admission, the market price of the Equity Shares may be volatile. Our Company‘s
operating results and prospects from time to time may be below the expectations of market
analysts and investors. At the same time, market conditions may affect the price of our
Company. Stock market conditions are affected by many factors, such as general economic
and political conditions, law and order activity, movements in or outlook on interest rates and
inflation rates, currency fluctuations, commodity prices, changes in investor sentiment
towards the retail market and the supply and demand of capital.
30. Significant trading volumes of the Equity Shares on the Stock Exchanges in the period on
listing could impact the price of our Company’s Equity Shares.
Following admission of our Equity Shares for trading on the Stock Exchanges, there may be a
period of relatively high volume trading in the Equity Shares. A high volume of sales of our
Equity Shares on the Stock Exchanges after admission, or the perception that these sales
might occur, could result in volatility in the market price of our Equity shares.
31. Restrictions & fluctuations on daily movement.
There are restrictions on daily movements in the price of the equity shares, which may
adversely affect a shareholder‘s ability to sell, or the price at which they can sell Equity
Shares at a particular point in time. After this issue, our Equity Shares may experience price
and volume fluctuations.
32. Our Company may decide to offer additional Equity Shares in the future, diluting the
interests of existing Shareholders which could adversely affect the market price of Equity
Shares.
Our Company‘s ability to execute our business strategy depends on our access to an
appropriate blend of debt financing, and equity financing. If our Company decides to offer
additional Equity Shares or other securities convertible into Equity Shares in the future, this
could dilute the interests of existing Shareholders which could have an adverse impact on the
market price of Equity Shares. An additional offering of Equity Shares by our Company, or
the public perception that an offering may occur, could have an adverse impact on the market
price of the Equity Shares.
16
EXTERNAL RISK FACTORS
RISK RELATING TO THE INDUSTRY
1. External events beyond the control of our Company may have a negative impact on our
business.
The occurrence of events such as terrorist attacks and other acts of violence or war involving
countries where we operate could adversely affect the financial markets, result in a loss of
business confidence and adversely affect our business, results of operations and financial
condition. Certain other factors beyond the control of our Company like earthquake, floods,
civil unrest, epidemic, disease, war etc. or any other acts of violence involving India and other
countries can adversely affect the business of our Company.
2. Any adverse changes to credit ratings of countries where we operate by an international
rating agency could have a negative impact on the business of our Company.
Any adverse changes to credit ratings of countries where we operate by an international
agency may harm our ability to raise additional financing and interest rates and other
commercial terms at which such financing is available. This could have an adverse effect on
our Company‘s financial performance and our ability to obtain financing to fund growth on
favorable terms or at all.
3. The interior infrastructure industry has become increasingly competitive and our growth
will depend on our ability to compete effectively.
The Indian laminates industry is highly fragmented with over 40% (forty percent) constituted
by the unorganized sector, from which the organized laminates sector faces intense
competition. The unorganized sector offers their products at highly competitive prices which
may not be matched by us and consequently affect our volume of sales and growth prospects.
We also face competition from the organized sector. Important factors affecting competition
in our industry are competitive pricing, ability to introduce innovative products, exclusive
designs, product branding, logistic advantages and the extent of distribution network. There
are no published sources available for establishing our present market share in the organized
laminates sector. However, we believe that our market share in the organized laminates sector
is approximately 28% (twenty eight percent) as of 31 March 2014.
4. As a manufacturing business, our success depends on the supply of raw materials which
are subject to certain risks such as availability and increase in pricing.
The primary raw material for laminates is paper and chemicals. The quality of our products
and customers‘ acceptance of our products depends on the quality of raw materials and our
ability to deliver in a timely manner. While we have long term relationships with many of our
suppliers, we have not entered into any formal written supply contracts with such parties to
ensure regular and timely supplies of raw materials in the medium and long term. From the
perspective of raw material supply, a medium term period would range from 6 (six) months to
12 (twelve) months and a long term period would be for a period exceeding 12 (twelve)
months.
The failure of our suppliers to deliver raw materials in the necessary quantities or on
schedules, of a specified quality/ standard/ specification may adversely affect our production
processes thereby giving rise to contractual penalties or liabilities, loss of customers and
affect our reputation any of which could adversely affect our business, financial condition and
results of operations.
17
Further, if the costs of raw materials rises and we are unable to recover these by resorting to
cost saving measures or by increasing the price of our products our results of operations could
suffer. Although we have not encountered any significant disruptions in the sourcing and/or
supply of our raw materials, we cannot assure you that such disruptions will not occur and/or
we shall continue to be able to source raw materials in a cost effective manner.
RISK RELATING TO INDIA
1. Significant changes have been made to the existing Indian Company law framework as a
result of the Companies Act 2013, which may result in higher compliance requirements
and increase our compliance cost.
With the provisions and rules under the Companies Act 2013 being notified, the
corresponding provisions of the Companies Act, 1956 have become inoperative. The
Companies Act, 2013 has resulted in significant changes to the Indian company law
framework, such as in the provisions relating to issue of capital, disclosures in prospectus,
corporate governance norms, audit matters, related party transactions, responsibility of
director and key managerial personnel, introduction of a provision allowing the initiation of
class action suits in India against companies by shareholders or depositors, a restriction on
investment by an Indian company through more than two layers of subsidiary investment
companies (subject to certain permitted exceptions), prohibitions on loans to directors and
insider trading and restrictions on directors and key managerial personnel from engaging in
forward dealing.
Further, the Companies Act, 2013 imposes greater monetary and other liability on our
Company and Directors for any non-compliance. To ensure compliance with the requirements
of the Companies Act, 2013, we may need to allocate additional resources, which may
increase our regulatory compliance costs and divert management attention. Any increase in
our compliance requirements or in our compliance costs may have an adverse effect on our
business and results of operations.
2. The extent and reliability of Indian infrastructure could adversely impact our results of
operations and financial condition.
India‘s physical infrastructure is less developed than that of many developed nations and
problems with its port, rail and road networks, electricity grid, communication systems or any
other public facility could disrupt our normal business activity. Any deterioration of India‘s
physical infrastructure would harm the national economy, disrupt the transportation of goods
and supplies, and add costs to doing business in India. These problems could interrupt our
business operations, which could have a material adverse effect on our results of operations
and financial condition.
3. Changes in Indian Government policies could adversely affect economic conditions in
India, and thereby adversely impact our results of operations and financial condition.
All of our production facilities are located in India, and a significant portion of its revenue is
derived from sales of its products in the Indian market. Consequently, our Company, and the
market price and liquidity of the Equity Shares, may be affected by changes in the policy of
the Government of India. For example, the imposition of foreign exchange controls, rising
interest rates, inflation, increases in taxation or the creation of new regulations could have a
detrimental effect on the Indian economy generally. The Indian Government has in recent
years sought to implement economic reforms, and the current Indian Government has
implemented policies and undertaken initiatives that continue the economic liberalization
policies pursued by previous Indian Governments. However, the roles of the Indian
18
Government and the state governments in the Indian economy as producers, consumers and
regulators have remained significant and there can be no assurance that liberalization policies
will continue in the future. Any significant change in such liberalization and deregulation
policies could adversely affect business and economic conditions in India generally and our
results of operations and financial condition in particular.
Further, if there is a change in accounting or tax policies applicable to Company, it may
impact our reported results of operations. Furthermore, should any development arise such as
a change in applicable law or rulings by court/tribunal /authorities/ that are unfavourable to
our business, we may need to make provisions in our financial statements, which may
increase our expenses, contingent and current liabilities.
4. Financial instability in other countries, particularly countries with emerging markets,
could disrupt Indian markets and our business and cause the trading price of our Equity
Shares to decrease.
The Indian financial markets and the Indian economy are influenced by economic and market
conditions in other countries, particularly emerging market countries in Asia. Although
economic conditions are different in each country, investors´ reactions to developments in one
country can have adverse effects on the securities of companies in other countries, including
India. A loss of investor confidence in the financial systems of other emerging markets may
cause volatility in Indian financial markets and, indirectly, in the Indian economy in general.
Any worldwide financial instability could also have a negative impact on the Indian economy.
This in turn could negatively impact the movement of exchange rates and interest rates in
India. In short, any significant financial disruption could have an adverse effect on our
business, future financial performance and the trading price of the Equity Shares.
5. Indian securities markets vary from various securities markets in other countries.
The Indian securities markets may be more or less volatile than other securities‘ markets in
the world, and the degree of company information available in the Indian securities market
will vary from the information available in other markets. Therefore, shareholders will be
subject to the risk of abnormal fluctuations in share prices on account of macro-economic and
political factors and may or may not have access to all the relevant information regarding the
securities.
Notes to Risk Factors
As on 30 September 2014, net worth of our Company was Rs. 21,898.57 lacs (Post-Scheme).
The book value of our Company was Rs. 90.73 with the net worth as on 30 September 2014 (Post-
Scheme).
Details of related party transactions as on 30 September 2014 are as follows:
Greenply Industries Limited
(holding company)
Rs. 5,00,000 – Finance (Equity contribution received)
19
SECTION III – INTRODUCTION
YOU SHOULD READ THE FOLLOWING SUMMARY TOGETHER WITH RISK FACTORS AND
MORE DETAILED INFORMATION ABOUT OUR COMPANY AND FINANCIAL DATA
INCLUDED ELSEWHERE IN THIS INFORMATION MEMORANDUM.
VI. SUMMARY OF INDUSTRY
(The information in this section is derived from various publicly available sources and other industry
sources. This information has not been independently verified by us or respective legal or financial advisors, and no representation is made as to the accuracy of this information. Industry sources and
publications generally state that the information contained therein has been obtained from sources generally believed to be reliable, but their accuracy, completeness and underlying assumptions are not
guaranteed and their reliability cannot be assured and accordingly, investment decisions should not be
based on such information.)
Indian laminates industry has been consistently growing since last six to seven years. The last two
years have been a boom time for mushrooming of new laminate units. As per latest estimates, India
has now more than 165 laminate producing establishments that include all kinds of laminates. It
includes all types of Laminates categories – decorative & non-decorative panels. Since two years the
economy has been slow and Indian laminates industry has been also affected up to an extent. Despite
this, many existing players, who have strong market presence expanded capacities and various new
players erected new laminates producing facilities that kept the industry expansion growth bound.
Total production of 1.35 crore (13.5 million) to 1.40 crore (14 million) sheets every month in the
country that includes export and domestic market. The Laminates production capacity has been
growing year on year. In terms of number of sheets, the production has seen a growth of above 12%
approximately since 2010. With growth in decorative laminates demands during 2011 & 2012 by
snatching up some share of reconstituted veneers and from the furniture industry (laminates are being
used instead of painting the inside areas of furniture), laminates noticed around 14% growth.
India‘s organised furniture industry is estimated at around US$8 billion and expected to grow at a
CAGR of about 25-30 per cent annually. India‘s furniture market was concentrated in Tier-I, Tier-II
and Tier-III cities; the leading 784 urban centres contributed 41 per cent to the total consumer
furniture market; Tier-I and Tier-II cities accounted for 33 per cent of the total market.
Growth drivers of the industry
Rising proportion of working age population
Rising urbanization
Rising consumer class
Rising nuclear families
Consumer Choices
Threats
Competition from both unorganised and other organised players, leading to difficulties in
improving market share
Cheaper imports in certain product categories
For further details please refer the Chapter titled ―Industry Overview‖
20
VII. SUMMARY OF BUSINESS
Our Company‘s current business is resultant of de-merger of the Decorative and Laminates business
of Greenply Industries Limited pursuant to the Composite Scheme of Arrangement. Post the said
Scheme, our Company‘s business has been designed to be an interior infrastructure company engaged
in the manufacture of laminates, decorative veneers and their allied products and are one of the largest
in India in the segments in which we operate.
We have a pan-India presence and export our laminate products to various countries including the
United States of America, Europe, Russia, United Kingdom, Israel, Middle East Countries, Singapore,
Thailand, Malaysia, Taiwan, Hong Kong.
Our Competitive strengths
Extensive distribution network
Strong brand recall
Proven and experienced management team
Cost efficient sourcing and locational advantage
Our global sales and marketing network
Product Portfolio
Our Business Strategy
Capacity expansion and manufacture of new products
To continue brand building and strengthening of the distributor network
Product Innovation
Newer Markets
For further details please refer the Chapter titled ―Business Overview‖
21
VIII. SUMMARY OF FINANCIAL INFORMATION
The information has been extracted from financial statements as on 30 September 2014:
BALANCE SHEET AS AT 30 SEPTEMBER 2014
Rs.
EQUITY AND LIABILITIES
Shareholders’ Funds
Share Capital 500000.00
Reserves and Surplus (172285.00)
Current Liabilities
Trade payables 16854.00
Other current liabilities 300000.00
TOTAL 644569.00
ASSETS
Non-Current assets
Other Non-Current Assets 96337.00
Current assets
Cash and Cash Equivalents 515697.00
Short-Term Loans and Advances
Other Current Assets 32535.00
STATEMENT OF PROFIT AND LOSS FROM 1 APRIL 2014 TO 30 SEPTEMBER 2014
Rs.
INCOME
Other Income 0
Total Revenue 0
EXPENDITURE
Other expenses 92434.00
Total expenses 92434.00
Profit/ (Loss) Before Tax (92434.00)
Less: Tax Expenses 0
Current Tax 0
Deferred Tax 0
Profit/ (Loss) After Tax (92434.00)
Earnings Per Equity Share of
Face value of Rs. [5/-] each
Basic and Diluted – Equity (0.92)
For further details please refer to the chapter titled “Financial Statements”
22
IX. COMPOSITE SCHEME OF ARRANGEMENT
The Hon‘ble Gauhati High Court vide its order dated 31 October 2014 has approved the
Composite Scheme of Arrangement whereby the decorative business of Greenply which
includes manufacturing and marketing of high pressure laminates, decorative veneers,
compact laminates and allied product(s) including all property, rights and powers and all
debts, liabilities, duties and obligations of the decorative business of Greenply (―Decorative
Business‖) stands demerged into a separate company viz. Greenlam Industries Limited (the
―Greenlam‖ or the ―Resulting Company‖). Presently, Decorative Business consists of
manufacturing units situated at Behror (Rajasthan) and Nalagarh (Himachal Pradesh),
marketing, branch and administrative office(s) located in India and subsidiaries/step-down
subsidiaries viz. Greenlam Asia Pacific Pte. Ltd. (registered in Singapore), Greenlam
America, Inc. (registered in USA), Greenlam Europe (UK) Limited (registered in UK),
Greenlam Asia Pacific (Thailand) Co. Limited (registered in Thailand), Greenlam Holding
Co. Limited (registered in Thailand), PT. Greenlam Asia Pacific (registered in Indonesia) and
Greenlam VT Industries Private Limited (registered in India).
The rationale for the Scheme is as follows:
(i) The nature of technology, risk, competition and capital intensity involved in each of
the undertakings of Greenply is distinct from each other. Consequently, each
undertaking of Greenply is capable of addressing independent business opportunities,
deploying different technologies and attracting different sets of investors, strategic
partners, lenders and other stakeholders.
(ii) The Scheme is likely to enable the business and activities comprised in the Demerged
Undertaking and remaining business and activities of Greenply to be pursued and
carried on with greater focus and attention through two separate companies each
having its own administrative set up. Independent management of each of the
undertakings of Greenply will ensure required depth and focus on each of the
businesses and adoption of strategies necessary for the growth of respective
businesses. The structure provides independence to the management in decisions
regarding the use of their respective cash flows for dividends, capital expenditure or
other reinvestment in their respective businesses.
(iii) The Scheme shall create a new platform for independent growth of the Decorative
Business, while allowing Greenply to concentrate its growth efforts in the plywood
and medium density fibreboard businesses in a more focused manner thereby
strengthening Greenply‘s and the Resulting Company‘s market leadership.
(iv) Pursuant to the issue and allotment of shares in terms of the Scheme, the shareholders
of Greenply shall hold shares in two companies, i.e. in Greenply and in Greenlam. It
gives the shareholders the ability to continue to remain invested in both or either of
the two companies giving them greater flexibility in managing and/or dealing with
their investments.
(v) The restructuring proposal is thus aimed at protecting and maximising value for the
shareholders of the Greenply. The Scheme is in the interest of the shareholders,
creditors and all other stakeholders of Greenply and shall not in any manner be
prejudicial to the interests of shareholders and creditors or general public at large.
The restructuring under the Scheme would enable focused business approach for the
maximisation of benefits to all stakeholders and capitalize on the opportunity for
growth.
23
The Salient Features of the Scheme are:
1. TRANSFER OF UNDERTAKING
With effect from the Appointed Date, without any further act, deed, instrument,
matter or thing, the Demerged Undertaking shall be demerged and transferred to or
shall be deemed to have been transferred to and vested in Greenlam as a going
concern for all the estate and interest of Greenply therein in accordance with and
subject to the modalities for transfer and vesting stipulated herein.
Demerged Undertaking means the whole business operations of Decorative Business
of Greenply. Without prejudice to the generality of the foregoing, the Demerged
Undertaking shall mean and include all property, rights and powers and all debts,
liabilities, duties and obligations of Greenply comprised in and/or pertaining to the
Demerged Undertaking as on the Appointed Date, including:
(a) All properties and assets, moveable and immovable, freehold and leasehold,
real and personal, corporeal and incorporeal, in possession, or in reversion,
present and contingent of whatsoever nature, wheresoever situated, as on the
Appointed Date relating to the Demerged Undertaking, all other lands,
buildings, commercial and residential flats and offices, plant and machinery,
electrical installations, vehicles, equipment, furniture, computers, computer
programmes, software, investments, sundry debtors, inventories, cash and
bank balances, bills of exchange, deposits, loans and advances and other
assets as appearing in the books of account of Greenply in relation to the
Demerged Undertaking;
(b) Leases, tenancies and agencies of Greenply pertaining to the Demerged
Undertaking, and all other interests or rights in or arising out of or relating to
the Demerged Undertaking together with all respective powers, interests,
charges, privileges, benefits, entitlements, industrial and other licenses,
registrations, quotas, information technology, patents, copyrights,
trademarks, brand names, websites, other intellectual property rights,
liberties, easements and advantages, subsidies, grants, taxes, share of advance
tax and MAT credits (including but not limited to credits in respect of sales
tax, value added tax, turnover tax, excise duty, service tax, and other indirect
taxes), deferred tax benefits and other benefits appertaining to the Demerged
Undertaking and/or to which Greenply is entitled to in respect of the
Demerged Undertaking of whatsoever kind, nature or description held,
applied for or as may be obtained thereafter;
(c) Right to use and avail of telephones, telefaxes, facsimile connections and
installations, utilities, electricity and other services, provisions, funds, benefit
of all agreements, contracts and arrangements and all other interests in
connection with or relating to the Demerged Undertaking;
(d) All earnest money and/or security deposits paid by Greenply in connection
with or relating to the Demerged Undertaking;
(e) The benefit of all respective contracts and engagements and all respective
books, papers, documents computer programs, manuals, data, catalogues,
quotations, sales and advertising materials, lists of present and former
customers and suppliers, customer credit information and records relating to
the Demerged Undertaking;
24
(f) All debts, liabilities, duties and obligations of Greenply in relation to the
Demerged Undertaking as appearing in the books of account of Greenply as
on the Appointed Date, including liabilities on account of secured loans,
unsecured loans, and sundry creditors and bonus, gratuity, and other
employee benefits pertaining to the Demerged Undertaking;
(g) All contracts, deeds, bonds, agreements and other instruments, of whatsoever
nature and pertaining to the Demerged Undertaking to which Greenply is a
party, subsisting or having effect immediately on the Appointed Date;
(h) All legal proceedings of whatsoever nature by or against Greenply pending
on the Appointed Date and relating to the Demerged Undertaking (including
property, rights, powers, liabilities, obligations and duties); and
(i) All employees of Greenply engaged in or in relation to the Demerged
Undertaking as on the Effective Date.
2. ISSUE OF SHARES BY GREENLAM
2.1 In consideration of the demerger and transfer of the Demerged Undertaking,
Greenlam shall, without further application, issue and allot to the shareholders of
Greenply whose names appear in the register of members of Greenply as on the
Record Date, 1 (One) equity share of Rs. 5.00 (Indian Rupees Five only) each in
Greenlam, credited as fully paid up for every 1 (One) equity share of INR 5.00
(Indian Rupees Five only) each held by them in Greenply.
2.2 Upon issue of the new equity shares by Greenlam to the shareholders of Greenply in
terms of the Scheme as mentioned in para 2.1 above, all existing equity shares held
by the existing shareholders of Greenlam, shall stand cancelled, without any further
act or deed. The reduction of capital of Greenlam pursuant to the Scheme shall be
given effect as an integral part of the Scheme and the consent given to the Scheme by
the shareholders and the creditors of Greenlam shall be deemed to be their consent
under the provisions of Section 100 and all other applicable provisions of the Act to
such reduction of capital of Greenlam and Greenlam shall not be required to convene
any separate meeting for that purpose. The order of the Hon‘ble Guahati High Court
sanctioning the Scheme shall be deemed to be an Order under Section 102 of the Act.
Notwithstanding the reduction of subscribed and paid-up equity share capital of
Greenlam, Greenlam shall not be required to add ―And Reduced‖ as suffix to its
name.
2.3 Such new equity shares issued by Greenlam shall pursuant to circular issued by
Securities Exchange Board of India on 4 February 2013 bearing no.
CIR/CFD/DIL/05/2013 and in accordance with the compliance with requisite
formalities under applicable laws, be listed and/or admitted to trading on the relevant
stock exchange(s) where the existing equity shares of Greenply are listed and/or
admitted to trading i.e. Greenply and Greenlam shall enter into such arrangements
and give such confirmations and/or undertakings as may be necessary in accordance
with the applicable laws or regulations for complying with the formalities of the said
stock exchanges.
2.4 Greenlam shall take necessary steps to increase and alter its authorized share capital
suitably to enable Greenlam to issue and allot the equity shares in Greenlam to the
shareholders of Greenply in terms of the Scheme.
25
2.5 The equity shares in Greenlam allotted pursuant to the Scheme shall remain frozen in
the depositories system till listing/ trading permission is given by the designated stock
exchange.
2.6 Till the listing of the equity shares of Greenlam to be issued pursuant to the Scheme,
there shall be no change in the pre-arrangement capital structure and shareholding
pattern or control in Greenlam which may affect the status of the approval of the
stock exchanges to the Scheme.
2.7 Equity shares of Greenlam are allotted to the members of Greenply in terms of the
Scheme by virtue of their interest in Greenply as a whole, including the Demerged
Undertaking. The interest of the said members in the Demerged Undertaking shall in
effect be continued through Greenlam after the demerger. For the purpose of availing
exemption under Regulation 10 of the SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations 2011, the promoters of Greenply, shall be deemed to have
been the promoters of Greenlam for the same duration they have been the promoters
of Greenply and this recognition shall be available on the listing of the equity shares
of Greenlam. Statutory exemptions for the transfer of shares of Greenlam amongst the
Greenply Shareholder Group and the Greenlam Shareholder Group shall be deemed
to be available to the Greenply Shareholder Group and Greenlam Shareholder Group
under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011
(the ―Takeover Code‖).
3. OTHERS
3.1 Within 12 (twelve) months of listing of the equity shares of Greenlam, there shall be a
realignment of shareholding between the Greenply Shareholder Group and the
Greenlam Shareholder Group such that: (a) the Greenlam Shareholder Group shall
transfer in one or more transactions, on the stock exchange or otherwise, such number
of equity shares of Greenply as mutually agreed, to the Greenply Shareholder Group;
and (b) the Greenply Shareholder Group shall transfer in one or more transactions, on
the stock exchange or otherwise, such number of equity shares of Greenlam as
mutually agreed to the Greenlam Shareholder Group.
3.2 The transfer of shares for realignment of shareholding and control in the respective
companies in terms of para 3.1 above shall be deemed to have happened, in pursuance
of the Scheme, in terms of mutual covenants contained herein.
3.3 Such transfer of equity shares between the Greenply Shareholder Group and the
Greenlam Shareholder Group shall be effected as an integral part of the Scheme and
shall enable them to concentrate their resources on, and focus management upon, the
business of their respective areas of interest for future growth, namely Greenlam
Shareholder Group on the Decorative Business and the Greenply Shareholder Group
on the plyboard and MDF and allied products businesses.
3.4 The proposed transfer will neither change the total shareholding / voting rights of the
promoter groups of Greenply nor will it affect or prejudice the interests of public
shareholders in any way.
3.5 Upon consummation of transfer envisaged in paragraph 3.1 above:
(i) Mr. Saurabh Mittal, Ms. Parul Mittal and Greenply Leasing & Finance
Private Limited shall cease to be a part of the promoter / promoter group of
Greenply. Similarly, Mr. Shobhan Mittal, Mr. Rajesh Mittal, Mr. Sanidhya
Mittal, Ms. Karuna Mittal, Rajesh Mittal (HUF), Prime Holdings Private
26
Limited, S. M. Management Private Limited, Vanashree Properties Private
Limited and Trade Combines shall not form part of the promoter / promoter
group of Greenlam.
(ii) Greenply and Greenlam shall be managed and controlled by their respective
shareholders i.e. Greenlam shall be under the exclusive management and
control of the Greenlam Shareholder Group and Greenply shall be under the
exclusive management and control of the Greenply Shareholder Group. The
shareholders of Greenply and Greenlam may reconstitute their respective
board of directors to reflect the change in shareholding.
3.6 It is clarified that the transfer of the equity shares of both Greenply and Greenlam and
the consequent change in management and control of the respective companies made
in terms of paras above shall be pursuant to and is an integral part of the Scheme.
Such transfer and change in control, being exempt under Regulation 10 of the
Takeover Code, shall not trigger the open offer requirements in Greenply and/or
Greenlam under Regulation 3 or Regulation 4 of the Takeover Code.
4. DETAILS OF ASSETS & LIABILITIES AS ON 31 MARCH 2013
(Rs. in lacs)
Nature of Assets/Liabilities Written
Down
Value
(WDV)
Amount of
Assets/
Liabilities
to be
Transferred
to the
Resulting
Company
Amount of
Assets/
Liabilities
Remaining
With The
Demerged
Company
Transfer
Price, If
Transferred
Other Than
Book
Value,
Then
Valuation
Report
Thereof
ASSETS
Non-Current Assets
Fixed Assets
Tangible Assets 64,345.68 16910.21 47435.47 N.A Intangible assets 833.16 345.94 487.22 N.A Capital Work-in-progress 2,337.08 619.14 1717.94 N.A
Investments 1,752.50 1743.54 8.96 N.A Long Term Loans & Advances 4,338.51 1194.30 3144.21 N.A Other Non-Current Assets 0.58 - 0.58 N.A
Current Assets
Inventories 32,791.39 16,055.42 16,735.97 N.A Trade Receivables 34,320.70 12,695.13 21,625.57 N.A Cash & bank Balances 1,627.82 104.46 1,523.36 N.A Short Term Loans & Advances 10,212.24 4,819.73 5,392.51 N.A Other Current Assets 25.62 - 25.62 N.A Total Assets 1,52,585.28 54,487.87 98,097.41
LIABILITIES
Non-Current Liabilities
Long-Term Borrowings 23,534.36 4,326.86 19,207.50 N.A
27
Deferred Tax Liabilities (Net) 4,033.45 630.46 3,402.99 N.A Other Long Term Liabilities 841.35 25.00 816.35 N.A
Long Term Provisions 1,667.06 546.17 1,120.89 N.A
Current Liabilities
Short-Term Borrowings 29,765.67 16,297.73 13,467.94 N.A Trade Payables 29,332.26 11,213.83 18,118.43 N.A Other Current Liabilities 14,669.63 4,894.00 9,775.63 N.A Short-Term Provisions 1,028.45 18.52 1,009.93 N.A Total Liabilities 1,04,872.23 37,952.57 66,919.66
Net Assets 47,713.05 16,535.30 31,177.75
28
X. GENERAL INFORMATION
Our Company (Corporate Identification Number U21016AS2013PLC011624) was
incorporated on 12 August 2013 as a public limited company with the name ―Greenlam
Industries Limited‖. Our Company received certificate of commencement of business on 16
August 2013. The registered office of our Company is situated at Makum Road, Tinsukia,
Assam – 786125. Pursuant to the Composite Scheme of Arrangement between Greenply and
our Company, which was approved by the Hon‘ble Gauhati High Court, vide order dated 31
October 2014 the ‗Decorative Business‘ stands demerged from Greenply and has been
transferred to and vested in our Company.
Address of the Registered Office:
Makum Road, Tinsukia, Assam – 786125
Phone: 0374-2352353
Fax: 0374-2338233
CIN Number: U21016AS2013PLC011624
Address of the Principal Office:
1501-1505, Narain Manzil, 23 Barakhamba Road, New Delhi - 110001
Phone: 011-42791399
Fax: 011-42791330
Address of Registrar of Companies:
Morellow Building, Ground Floor,
Kachary Road, Shillong, Meghalaya – 793001
Board of Directors:
The Board of Directors as on the date of filing of the Information Memorandum
S.No. Name of Director Designation
1. Mr. Shiv Prakash Mittal Non-executive chairman
2. Mr. Saurabh Mittal Managing Director & CEO
3. Ms. Parul Mittal Director- Design and
Marketing
4. Mr. Vijay Kumar Chopra Independent Director
5. Ms. Urvashi Saxena Independent Director
6. Ms. Sonali Bhagwati Dalal Independent Director
For further details of the Board of Directors, refer to chapter titled ―Our Management‖.
Authority for Listing
The Hon‘ble Gauhati High Court vide its order dated 31 October 2014 has approved the
Composite Scheme of Arrangement whereby the decorative business of Greenply shall be
transferred to and vested with Greenlam with effect from the Appointed Date pursuant to
Section 100 to 104 and 391 to 394 of the Companies Act. For further details of the Scheme
please refer to Section titled ―Composite Scheme of Arrangement‖. In accordance with the
said Scheme, the Equity Shares of our Company issued pursuant to the Scheme shall be listed
and admitted to trading on NSE and BSE. Such listing and admission for trading is not
automatic and will be subject to fulfillment of listing criteria by our Company as permitted by
NSE and BSE for such issues and also subject to such other terms and conditions as may be
prescribed by BSE and NSE at the time of the application for listing by our Company. Our
29
Company has received ‗in-principle approvals‘ from NSE and BSE in relation to listing of
Equity Shares issued pursuant to the Scheme vide their letters dated 25 March 2014.
Eligibility Criterion
There being no initial public offering or rights issue of securities, the eligibility criteria in
terms of Chapter III of SEBI (ICDR) Regulations, 2009, as amended are not applicable. SEBI
has vide its circulars i.e. SEBI Circular No. CIR/CFD/DIL/5/2013 dated 4 February 2013 and
SEBI Circular No. CIR/CFD/DIL/8/2013 dated 21 May 2013 (both circulars together as
―SEBI Circulars‖), subject to certain conditions permitted unlisted issuer companies to make
an application under Rule 19 (7) of the SCRR for relaxing from the strict enforcement of Rule
19 (2) (b) of SCRR for listing equity shares on a recognized stock exchange without making
an initial public offer. SEBI has granted our Company such relaxation from requirement of
compliance with Rule 19 (2) of SCRR vide its letter bearing number
CFD/DIL/BNS/SGS/OW/4361/2015 dated 10 February 2015. Our Company has submitted
the Information Memorandum, containing information to BSE and NSE and making such
information available to public through their websites viz. www.bseindia.com and
www.nseindia.com.
Our Company has made the said Information Memorandum available on its website viz
www.greenlam.com. Our Company will publish an advertisement in the newspapers
containing details in accordance with SEBI Circulars. The advertisement shall contain
specific reference to the availability of this Information Memorandum on the website of our
Company.
Prohibition by SEBI
Our Company, Directors, Promoter, other companies promoted by the Promoter and
companies with which our Directors are associated as directors have not been prohibited from
accessing the capital markets under any order or direction passed by SEBI.
General Disclaimer from our Company/ Caution
Our Company accepts no responsibility for statement made otherwise than in the Information
Memorandum or in the advertisements to be published in terms of SEBI Circulars or any
other material issued by or at the instance of our Company and anyone placing reliance on
any other source of information would be doing so at his or her own risk. All information
shall be made available by our Company to the public and investors at large and no selective
or additional information would be available for a section of the investors in any manner.
Bankers to our Company
The list of bankers to our Company is as follows:
(i) State Bank of India
(ii) IDBI Bank Limited
(iii) Bank of Baroda
(iv) ICICI Bank Limited
(v) CITI Bank, N.A.
(vi) Standard Chartered Bank
(vii) Federal Bank Limited
(viii) Axis Bank Limited
(ix) DCB Bank Limited
30
Statutory Auditors
M/S D. Dhandaria & Company
Address: Thana Road, Post-Tinsukia, Assam – 786 125
Phone: 0374 - 2337684
Fax: 0374 - 2350181
Email: [email protected]
Contact Person: Mr. Dindayal Dhandaria
Registrar and Share Transfer Agent
Link Intime India Pvt. Ltd,
Address: 44, Community Centre, Phase-I,
Near PVR, Naraina Ind. Area, New Delhi-110028,
Phone: +91 11 4141 0592,
Fax: +91 11 4141 0591,
Email: [email protected]
Contact Person: Mr. Vishwa Mitra Joshi
31
XI. CAPITAL STRUCTURE
Share Capital
Pre-Scheme
Particulars
Amount in Rs.
Authorised Capital
20,00,000 Equity Shares of Rs. 5 each 1,00,00,000
Total 1,00,00,000
Issued, Subscribed and Paid-Up
1,00,000 Equity Shares of Rs. 5 each 5,00,000
Total 5,00,000
Post-Scheme
Particulars
Amount in Rs.
Authorised Capital
3,00,00,000 Equity Shares of Rs. 5 each 15,00,00,000
Total 15,00,00,000
Issued, Subscribed and Paid-Up
2,41,36,374 Equity Shares of Rs. 5 each 12,06,81,870
Total 12,06,81,870
Pursuant to the Scheme, the Company has issued and allotted to each of the members of
Greenply whose name is recorded in the register of members and records of the Depositary as
members of Greenply on the Record Date, Equity Shares in the Company in the ratio of 1
(One) equity share in the Resulting Company of the face value of Rs. 5/- (Indian Rupees Five)
each credited as fully paid-up for every 1 (One) Equity Share of Rs. 5/- (Indian Rupees Five)
each fully paid-up held by such member in Greenply.
Notes to Capital Structure:
(a) Equity Share Capital History
S
No.
Particulars
of
Allotment
Date
when
fully
paid up
Consider
ation
(cash,
bonus,
kind etc.)
No. of
Equity
Shares
Cum
mulat
ive
No. of
Equit
y
Share
s
Face
Value
(in
Rs.)
Issue
Price
(in
Rs.)
Lock-
in
Period
1. Initial
subscription
13
August
2013
Cash 1,00,000 1,00,0
00*
5 5 N.A
2. Pursuant to
Scheme 29
Novem
- 2,41,36,3
74 2,41,3
6,374 5 5 N.A
32
ber
2014
* Upon issue of the new equity shares by Greenlam to the shareholders of Greenply in terms
of the Scheme, all existing equity shares held by the existing shareholders of Greenlam, have
been cancelled, without any further act or deed.
(b) The Company was incorporated with authorized capital of Rs. 10,000,000/- (Indian
Rupees Ten Million Only) divided into 2,000,000 Equity Shares of Rs. 5/- (Indian
Rupees Five Only) each.
(c) The authorized share capital of the Company is increased to Rs. 15,00,00,000 (Indian
Rupees Fifteen Crores only) divided into 3,00,00,000 (Three Crores) Equity shares of
Rs. 5 (Indian Rupees Five Only) each, vide ordinary resolution of the shareholders of
the Company passed at its annual general meeting held on 30 October 2014.
(d) The details of the Scheme and share entitlement ratio are given under the heading
―Composite Scheme of Arrangement‖.
(e) Our Company presently does not intend or propose to alter the capital structure for a
period of six months from the date of this Information Memorandum, by way of split
or consolidation of the denomination of Equity Shares or issue of Equity Shares
(including any issue of securities convertible into or exchangeable, directly or
indirectly, for Equity Shares) on a preferential basis or issue of bonus or rights or
further public issue of Equity Shares or qualified institutions placement otherwise.
However, if our Company enters into acquisitions, joint ventures or other
arrangements, we may, subject to necessary approvals, consider raising additional
capital to fund such activity or use Equity Shares as currency for acquisition or
participation in such joint ventures.
(f) Our Promoter and Promoter Group, our directors and their immediate relatives have
not purchased or sold or financed, directly or indirectly, purchase of equity shares of
our Company within six months immediately preceding the date of this Information
Memorandum.
(g) Our Company, our directors or our Promoter have not entered into any buy-back,
standby or similar arrangements to purchase equity shares of our Company from any
person.
(h) Equity Shares being issued in the Scheme are fully paid up at the time of allotment.
(i) As on the date of this Information Memorandum, there are no outstanding warrants,
options or rights to convert debentures, loans or other instruments into equity shares
of our Company.
(j) There shall be only one denomination for the equity shares of our Company, subject
to applicable regulations and our Company shall comply with such disclosure and
accounting norms specified by SEBI, from time to time.
(k) Our Company has 4,035 members as on the date of this Information Memorandum
33
SHAREHOLDING PATTERN
(a) Shareholding pattern of the Company before the Scheme
Category
code
Category of shareholder
Shareholding prior to demerger
No. %
(A) Promoter and Promoter Group
(1) Indian
(a) Individuals/ Hindu Undivided Family 6 0.01
(b) Central Government/ State Government(s) - -
(c) Bodies Corporate 99,994 99.99
(d) Financial Institutions/ Banks - -
(e) Any Other (specify) - -
Sub-Total (A)(1) 1,00,000 100.00
(2) Foreign
(a) Individuals (Non-Resident Individuals/
Foreign Individuals)
- -
(b) Bodies Corporate - -
(c) Institutions - -
(d) Qualified Foreign Investor - -
(e) Any Other (specify) - -
Sub-Total (A)(2) - -
Total Shareholding of Promoter and
Promoter Group (A)= (A)(1)+(A)(2)
1,00,000 100.00
(B) Public shareholding
(1) Institutions - -
(a) Mutual Funds/UTI - -
(b) Financial Institutions/ Banks - -
(c) Central Government/ State Government(s) - -
(d) Venture Capital Funds - -
(e) Insurance Companies - -
(f) Foreign Institutional Investors - -
(g) Foreign Venture Capital Investors - -
(h) Qualified Foreign Investor - -
(i) Any Other (specify) - -
Sub-Total (B)(1) - -
(2) Non-institutions
(a) Bodies Corporate - -
(b) Individuals -
i. Individual shareholders holding nominal
share capital up to Rs. 1 lakh.
ii. Individual shareholders holding nominal
share capital in excess of Rs. 1 lakh.
- -
(c) Qualified Foreign Investor - -
34
Category
code
Category of shareholder
Shareholding prior to demerger
(d) Any Other (specify)
Sub-Total (B)(2) - -
Total Public Shareholding (B)=
(B)(1)+(B)(2)
- -
TOTAL (A)+(B) 1,00,000 100.00
(C) Shares held by Custodians and against which Depository Receipts have been
issued
(1) Promoter and Promoter Group - -
(2) Public - -
GRAND TOTAL (A)+(B)+(C) 1,00,000 100.00
(b) Shareholding pattern of the Company after the Scheme
Category
code
Category of shareholder
Shareholding post demerger
No. %
(A) Promoter and Promoter Group
(1) Indian
(a) Individuals/ Hindu Undivided Family 43,18,636 17.89
(b) Central Government/ State Government(s) - -
(c) Bodies Corporate 89,56,364 37.11
(d) Financial Institutions/ Banks - -
(e) Any Other (specify) - -
Sub-Total (A)(1) 1,32,75,000 55.00
(2) Foreign
(a) Individuals (Non-Resident Individuals/
Foreign Individuals)
- -
(b) Bodies Corporate - -
(c) Institutions - -
(d) Qualified Foreign Investor - -
(e) Any Other (specify) - -
Sub-Total (A)(2) - -
Total Shareholding of Promoter and
Promoter Group (A)= (A)(1)+(A)(2)
1,32,75,000 55.00
(B) Public shareholding
(1) Institutions - -
(a) Mutual Funds/UTI 18,33,207 7.60
(b) Financial Institutions/ Banks - -
(c) Central Government/ State Government(s) - -
(d) Venture Capital Funds - -
(e) Insurance Companies - -
35
Category
code
Category of shareholder
Shareholding post demerger
(f) Foreign Institutional Investors 37,23,100 15.43
(g) Foreign Venture Capital Investors - -
(h) Qualified Foreign Investor - -
(i) Any Other (specify) - -
Sub-Total (B)(1) 55,56,037 23.02
(2) Non-institutions
(a) Bodies Corporate 5,53,642 2.29
(b) Individuals -
i. Individual shareholders holding nominal
share capital up to Rs. 1 lakh.
7,71,355 3.20
ii. Individual shareholders holding nominal
share capital in excess of Rs. 1 lakh.
39,03,258 16.17
(c) Qualified Foreign Investor - -
(d) Any Other (specify)
(d-i) NRI 55,315 0.23
(d-ii) Clearing Member 17,911 0.07
(d-iii) Foreign Company - -
(d-iv) Trust 3,586 0.01
Sub-Total (B)(2) 53,05,067 21.98
Total Public Shareholding (B)=
(B)(1)+(B)(2)
1,08,61,374 45.00
TOTAL (A)+(B) 2,41,36,374 100.00
(C) Shares held by Custodians and against which Depository Receipts have been
issued
(1) Promoter and Promoter Group - -
(2) Public - -
GRAND TOTAL (A)+(B)+(C) 2,41,36,374 100.00
(c) List of persons/entities comprising as Promoter and Promoter Group of the Company
after the Scheme#
S. No.
Name of Promoter
Number of Equity
Shares
Percentage of paid
up capital
1 Rajesh Mittal on behalf of Rajesh
Mittal HUF
1,50,000 0.62
2 Rajesh Mittal 5,33,180 2.21
3 Saurabh Mittal 1,59,000 0.66
4 Saurabh Mittal on behalf of
Trade Combines, Partnership
Firm
6,96,457 2.89
5 Shobhan Mittal 4,72,400 1.96
6 Shobhan Mittal on behalf of
Trade Combines, partnership
firm
9,28,609 3.85
36
7 Shiv Prakash Mittal 5,06,000 2.10
8 Shiv Prakash Mittal on behalf of
Shiv Prakash Mittal HUF
1,78,000 0.74
9 Shiv Prakash Mittal on behalf of
Trade Combines, partnership
firm
4,85,410 2.01
10 Sanidhya Mittal 18,000 0.07
11 Santosh Mittal 55,180 0.23
12 Karuna Mittal 1,36,000 0.56
13 Parul Mittal 400 0.00
14 Greenply Leasing & Finance Pvt
Ltd
27,14,731 11.25
15 Prime Holdings Pvt. Ltd. 24,08,560 9.98
16 S.M. Management Pvt. Ltd. 35,43,462 14.68
17 Vanashree Properties Pvt. Ltd. 2,89,611 1.20
TOTAL 1,32,75,000 55.00
Note:
# Pursuant to Clause 17 of the Composite Scheme of Arrangement, within 12 (twelve) months
of listing of the equity shares of Greenlam Industries Limited, there shall be a realignment of
shareholding between the Greenply Shareholder Group and the Greenlam Shareholder
Group such that:(a) the Greenlam Shareholder Group shall transfer in one or more
transactions, on the stock exchange or otherwise, such number of equity shares of Greenply
Industries Limited as mutually agreed, to the Greenply Shareholder Group; and (b) the
Greenply Shareholder Group shall transfer in one or more transactions, on the stock
exchange or otherwise, such number of equity shares of Greenlam Industries Limited as
mutually agreed to the Greenlam Shareholder Group. Greenply Shareholder Group and
Greenlam Shareholder Group shall have the meanings respectively assigned to them in the
Scheme. Mr. Saurabh Mittal, Ms. Parul Mittal and Greenply Leasing & Finance Private
Limited shall cease to be a part of the promoter / promoter group of Greenply Industries
Limited. Similarly, Mr. Shobhan Mittal, Mr. Rajesh Mittal, Mr. Sanidhya Mittal, Ms. Karuna
Mittal, Rajesh Mittal (HUF), Prime Holdings Private Limited, S. M. Management Private
Limited, Vanashree Properties Private Limited and Trade Combines shall not form part of the
promoter / promoter group of Greenlam Industries Limited.
(d) Top ten shareholders 10 day prior to and as on the date of this Information
Memorandum
S. No.
Name of Shareholder
Number of Equity
Shares held
Percentage of total
capital
1 S.M. Management Private
Limited
35,43,462 14.681
2 Greenply Leasing and Finance
Private Limited
27,14,731 11.247
3 Prime Holding Private Limited 24,08,560 9.978
4 HSBC Bank (Mauritius) Limited
A/C Jwalamukhi Investment
Holdings
23,76,884 9.847
5 Ashish Dhawan 23,69,488 9.817
6 HDFC Trustee Company Ltd. 18,33,207 7.595
7 Shobhan Mittal (including shares 14,01,009 5.804
37
held on behalf of Trade
Combines, Partnership Firm)
8 Shiv Prakash Mittal (including
shares held on behalf of Trade
Combines, Partnership Firm)
9,91,410 4.107
9 Saurabh Mittal (including shares
held on behalf of Trade
Combines, Partnership Firm)
8,55,457 3.544
10 Citigroup Global Markets
Mauritius Private Limited
7,26,342 3.009
Total 1,92,20,550 79.629
Note: The above shareholding is based on the aggregate shareholding considered on the
basis of PAN number.
(e) Statement showing holding of securities (including shares, warrants, convertible
securities) of persons belonging to the category “Public” and holding more than 1% of
the total number of shares
Sr. No. Name of the shareholder Number of
shares held
Shares as a
percentage of total
number of shares {i.e.,
Grand Total
(A)+(B)+(C) indicated
in Statement at para
(I)(a) above}
1 HSBC Bank (Mauritius) Limited
A/C Jwalamukhi Investment
Holdings
23,76,884 9.85
2 Ashish Dhawan 23,69,488 9.82
3 HDFC Trustee Company Ltd 18,33,207 7.60
4 Citigroup Global Markets Mauritius
Private Limited 7,26,342 3.01
5 Akash Bhanshali and Manek
Bhanshali
3,30,000
1.37
6 Morgan Stanley Mauritius Company
Limited 3,29,432 1.36
7 Vallabh Roopchand Bhanshali 3,19,100 1.32
8 Mangal Bhanshali 2,60,000 1.08
TOTAL 85,44,453 35.40
(f) Statement showing holding of securities (including shares, warrants, convertible
securities) of persons belonging to the category “Public” and holding more than 5% of
the total number of shares
Sr. No. Name(s) of the
shareholder(s) and
the Persons Acting in
Concert (PAC) with
them
Number
of shares
Shares as a
percentage of
total number of
shares
{i.e., Grand Total
(A)+(B)+(C) indicated
in
38
Statement at para
(I)(a)
above}
1 HSBC Bank (Mauritius) Limited
A/C Jwalamukhi Investment
Holdings
23,76,884 9.85
2 Ashish Dhawan 23,69,488 9.82
3 HDFC Trustee Company Ltd 18,33,207 7.60
Total 65,79,579 27.26
(g) Post Realignment Shareholding of our Company#
Category
code
Category of shareholder
Shareholding post demerger
No. %
(A) Promoter and Promoter Group
(1) Indian
(a) Individuals/ Hindu Undivided Family 8,98,580 3.72
(b) Central Government/ State Government(s) - -
(c) Bodies Corporate 27,14,731 11.25
(d) Financial Institutions/ Banks - -
(e) Any Other (specify)
Greenlam Shareholder Group (Saurabh Mittal,
Parul Mittal, Greenply Leasing and Finance
Pvt. Ltd., Shiv Prakash Mittal, Santosh Mittal,
Shiv Prakash Mittal (HUF))
96,61,689 40.03
Sub-Total (A)(1) 1,32,75,000 55.00
(2) Foreign
(a) Individuals (Non-Resident Individuals/
Foreign Individuals)
- -
(b) Bodies Corporate - -
(c) Institutions - -
(d) Qualified Foreign Investor - -
(e) Any Other (specify) - -
Sub-Total (A)(2) - -
Total Shareholding of Promoter and
Promoter Group (A)= (A)(1)+(A)(2)
1,32,75,000 55.00
(B) Public shareholding
(1) Institutions
(a) Mutual Funds/UTI 18,33,207 7.60
(b) Financial Institutions/ Banks - -
(c) Central Government/ State Government(s) - -
(d) Venture Capital Funds - -
39
Category
code
Category of shareholder
Shareholding post demerger
(e) Insurance Companies - -
(f) Foreign Institutional Investors 37,23,100 15.43
(g) Foreign Venture Capital Investors - -
(h) Qualified Foreign Investor - -
(h) Any Other (specify) - -
Sub-Total (B)(1) 55,56,037 23.02
(2) Non-institutions
(a) Bodies Corporate 5,53,642 2.29
(b) Individuals -
i. Individual shareholders holding nominal
share capital up to Rs. 1 lakh.
7,71,355 3.20
ii. Individual shareholders holding nominal
share capital in excess of Rs. 1 lakh. 39,03,258 16.17
(c) Qualified Foreign Investor - -
(d) Any Other (specify)
(d-i) NRI 55,315 0.23
(d-ii) Clearing Member 17,911 0.07
(d-iii) Foreign Company - -
(d-iv) Trust 3,586 0.01
Sub-Total (B)(2) 53,05,067 21.98
Total Public Shareholding (B)=
(B)(1)+(B)(2)
1,08,61,374 45.00
TOTAL (A)+(B) 2,41,36,374 100.00
(C) Shares held by Custodians and against which Depository Receipts have been
issued
(1) Promoter and Promoter Group - -
(2) Public - -
GRAND TOTAL (A)+(B)+(C) 2,41,36,374 100.00
(h) Post Realignment Shareholding of Promoter/ Promoter Group#
S. No.
Name of Promoter
Number of Equity
Shares
Percentage of Paid
up Capital
1 Saurabh Mittal 1,59,000 0.66
2 Parul Mittal 400 0.00
3 Greenply Leasing & Finance Pvt
Ltd 27,14,731 11.25
4 Shiv Prakash Mittal 5,06,000 2.10
5 Santosh Mittal 55,180 0.23
6 Shiv Prakash Mittal on behalf of
Shiv Prakash Mittal HUF 1,78,000 0.74
7 Greenlam Shareholder Group
(Saurabh Mittal, Parul Mittal,
Greenply Leasing and Finance
96,61,689 40.03
40
Pvt. Ltd., Shiv Prakash Mittal,
Santosh Mittal, Shiv Prakash
Mittal (HUF))* TOTAL 1,32,75,000 55.00
Note:
*The expected shareholders pursuant to transfer of shares in line with Clause 17 of the
Composite Scheme of Arrangement.
# Pursuant to Clause 17 of the Composite Scheme of Arrangement, within 12 (twelve) months
of listing of the equity shares of Greenlam Industries Limited, there shall be a realignment of
shareholding between the Greenply Shareholder Group and the Greenlam Shareholder
Group such that:(a) the Greenlam Shareholder Group shall transfer in one or more
transactions, on the stock exchange or otherwise, such number of equity shares of Greenply
Industries Limited as mutually agreed, to the Greenply Shareholder Group; and (b) the
Greenply Shareholder Group shall transfer in one or more transactions, on the stock
exchange or otherwise, such number of equity shares of Greenlam Industries Limited as
mutually agreed to the Greenlam Shareholder Group. Greenply Shareholder Group and
Greenlam Shareholder Group shall have the meanings respectively assigned to them in the
Scheme. Mr. Saurabh Mittal, Ms. Parul Mittal and Greenply Leasing & Finance Private
Limited shall cease to be a part of the promoter / promoter group of Greenply Industries
Limited. Similarly, Mr. Shobhan Mittal, Mr. Rajesh Mittal, Mr. Sanidhya Mittal, Ms. Karuna
Mittal, Rajesh Mittal (HUF), Prime Holdings Private Limited, S. M. Management Private
Limited, Vanashree Properties Private Limited and Trade Combines shall not form part of the
promoter / promoter group of Greenlam Industries Limited
41
XII. STATEMENT OF POSSIBLE DIRECT TAX BENEFITS
To
The Board of Directors,
M/s. Greenlam Industries Ltd.,
Makum Road,
P.O. TINSUKIA – 786125
(Assam)
SUB: STATEMENT OF POSSIBLE DIRECT TAX BENEFITS
Dear Sirs,
We hereby report that the attached Annexure states the possible direct tax benefits available
to Greenlam Industries Limited (‗the Company‘) and to its shareholders under the Income
Tax Act, 1961 and the Wealth Tax Act, 1957, presently in force in India, subject to the fact
that several of these benefits are dependent on the Company or its shareholders fulfilling the
conditions prescribed under the relevant tax laws. Hence the ability of the Company or its
shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which
based on the business imperative, the Company or its shareholders may or may not choose to
fulfill.
The benefits discussed in the Annexure are not exhaustive. This Statement is only intended to
provide general information to the investors and is neither designed nor intended to be a
substitute for the professional tax advice. In view of the individual nature of the tax
consequences and the changing tax laws, each investor is advised to consult his or her own
tax consultant with respect to the specific tax implications arising out of their participations in
the issue.
We do not express any opinion or provide any assurance as to whether:
The Company or its shareholders will continue to obtain these benefits in future ; or
The conditions prescribed for availing of these benefits have been/ would be met with.
The contents of this Annexure are based on the information, explanations and representations
obtained from the Company and on the basis of our understanding of the business activities
and operations of the Company and interpretations of the current tax laws.
For D. DHANDARIA & COMPANY
(Chartered Accountants)
ICAI Firm Reg. No. 306147E
(Dindayal Dhandaria)
Partner
Membership No.10928
Place: Tinsukia
Date: 11.11.2014
42
ANNEXURE TO THE STATEMENT OF POSSIBLE DIRECT TAX BENEFITS
I. SPECIAL TAX BENEFITS
A. Special Tax Benefits Available to the Company
1. Under Section 80-IC(2)(b)(ii) of the Act read with sub-section (3)(ii) of the said
section, the profits and gains of the Company‘s manufacturing unit (i.e. undertaking)
located at Panjhera, Nalagarh in Himachal Pradesh is entitled to a deduction of one-
hundred per cent for five assessment years commencing with the initial assessment
year and thereafter, thirty per-cent of the profits and gains for the next five assessment
years. The said undertaking having started manufacturing goods in the financial year
2009-2010, is entitled to such deduction from Assessment Year 2010-2011 onwards.
2. Under section 32AC of the Act, the Company is entitled to a deduction on the actual
cost of the new assets as follows:
(a) For the assessment year 2014-15, fifteen per cent of a sum equal to the plant &
machinery acquired and installed after the 31st day of March, 2013 but before
the 1st day of April, 2014, if the actual cost of such new asset exceeds one
hundred crore rupees, and
(b) For the assessment year 2015-16, fifteen per cent of a sum equal to the plant &
machinery acquired and installed after the 31st day of March, 2013 but before
the 1st day of April, 2015, as reduced by the amount of deduction allowed, if
any, for the assessment year 2014-15.
3. Under section 115BBD(1) of the IT Act, gross dividends received by the Company
from specified foreign company is taxable at a concessional rate of fifteen per cent
plus applicable Surcharge, Education Cess and Secondary and Higher Education Cess
on income tax.
B. Special Tax Benefits Available to the Shareholders of the Company
There are no special tax benefits available to the shareholders of the Company.
II. GENERAL TAX BENEFITS
Under the Income Tax Act, 1961 (“the Act”)
The following tax benefits shall, interalia, be available to the company and its prospective
shareholders under the Act.
A. General Benefits Available to the Company
1. Subject to compliance of certain conditions laid down in Section 32 of the Act, the
Company will be entitled to a deduction for depreciation: -
(a) In respect of tangible assets at the rates prescribed under Income Tax Rules,
1962.
(b) In respect of intangible assets being in the nature of know-how, patents,
copyrights, trademarks, licenses, franchises or any other business or
commercial rights of similar nature acquired after 31st day of March, 1998 at
the rates prescribed under Income Tax Rules, 1962.
43
(c) In respect of any new machinery or plant (other than ships and aircraft),
which has been acquired and installed after 31st March, 2005, a further sum of
20% of the actual cost of such machinery or plant will be allowed as a
deduction.
(d) Unabsorbed depreciation if any, for an Assessment Year can be carried
forward & set off against any sources of income in subsequent Assessment
Years as per section 32(2) of the Act.
2. Under the provisions of section 35(1)(i) of the Act read with clause (iv) of this sub-
section, the Company shall be eligible for deduction of any expenditure (except
capital expenditure for acquisition of land) laid out or expended on scientific research
related to the business of the company.
3. Under the provisions of section 35(1)(ii) of the Act, the Company shall be eligible for
a weighted deduction of 175% of any sum paid to an approved scientific research
association which has, its object, undertaking of scientific research or to an approved
university, college or other institution to be used for scientific research, related or
unrelated to the business of the Company, subject to fulfillment of the prescribed
conditions.
4. Under the provisions of section 35(1)(iia) of the Act, the Company shall be eligible
for a weighted deduction of 125% of any sum paid to certain companies to be used by
it for scientific purpose, subject to fulfillment of the prescribed conditions.
5. Under the provisions of section 35(1)(iii) of the Act, the Company shall be eligible for
a weighted deduction of 125% of any sum paid to an approved research association
which has, its object, undertaking of scientific research or to an approved university,
college or other institution to be used by it for research in social sciences or statistical
research, related or unrelated to the business of the Company, subject to fulfillment of
the prescribed conditions.
6. Under the provisions of section 35(2AB)(i) of the Act, the Company shall be eligible
for a weighted deduction of 200% of any expenditure incurred by the Company on in-
house scientific research and development facility approved by the prescribed
authority.
7. Under the provisions of section 35AC of the Act, the Company shall be entitled to
deduction for any expenditure by way of payment of any sum to a public sector
company or to a local authority or to an association or institution approved by the
National Committee for carrying out any eligible project or scheme or for any
expenditure directly made by it on the eligible project or scheme.
8. Under the provisions of section 35CCA of the Act, the Company shall be entitled to
deduction for any expenditure by way of payment of any sum to an association or
institution which has as its object the undertaking of any programme of rural
development or training of persons for implementing such programmes approved by
the prescribe authority or to a rural development fund or to the National Urban
Poverty Eradication Fund set up and notified by the Central Government in this
behalf.
9. Under Section 35D of the Act, the Company is eligible for deduction in respect of
specified preliminary expenditure incurred by the Company in connection with
extension of its undertaking or in connection with setting up a new unit for an amount
44
equal to 1/5th of such expenses over 5 successive Assessment Years, subject to the
conditions and limits specified in the section.
10. Under section 35DD of the Act, the Company is eligible for deduction in respect of
any expenditure incurred for the purpose of demerger for an amount equal to one-fifth
of such expenses over five successive assessment years.
11. Under section 35DDA of the IT Act, the Company is entitled to deduction in respect
of expenditure incurred in connection with voluntary retirement of its employees, of
an amount equal to 1/5th of such expenses every year for a period of 5 years
12. Under the provisions of section 54EC of the Act and subject to the conditions and to
be extent specified therein, long term capital gains [not covered under the section
10(38) of the Act] arising on the transfer of long term capital assets by the Company
will be exempt from capital gains tax subject to a limit of rupees fifty lakhs if the
capital gains are invested within a period of 6 months during the financial year in
which the assets are transferred or within the subsequent financial year from the date
of transfer in the bonds issued by-
National Highway Authority of India constituted under section 3 of National
Highways Authority of India Act, 1988: on or after the 1st day of April 2006.
Rural Electrification Corporation Limited, a company formed and registered
under the Companies Act, 1956 on or after the 1st day of April, 2006.
If only part of the capital gain is so reinvested, the exemption shall be proportionately
reduced. The amount so exempted shall be chargeable to tax subsequently, if the
specified assets are transferred or converted within three years from the date of their
acquisition.
13. Under section 10(34) of the Act, dividend (whether interim or otherwise), if any,
received by the Company on its investments in equity shares of another domestic
company shall be exempt from tax if such company has been subjected to "Dividend
Distribution Tax" under section 115-O. The expenditure relatable to this income need
to be determined in accordance with the provisions of section 14A of the Act read
with rule 8D of the Income Tax Rules, 1962. However, under section 94(7) of the
Act, the losses arising on account of Sale/transfer of shares purchased up to three
months prior to the record date and sold within three months after such date will be
disallowed to the extent of dividend on such shares are claimed as tax exempt by the
shareholder.
14. Under section 10(35) of the Act, income received by the Company in respect of units
of a mutual fund specified under section 10(23D) of the Act (other than income
arising from transfer of such units) shall be exempt from tax. The expenditure
relatable to this income need to be determined in accordance with the provisions of
section 14A of the Act read with rule 8D of the Income Tax Rules, 1962. Moreover,
under section 94(7) of the Act, the losses arising on account of Sale/transfer of units
purchased up to three months prior to the record date and sold within nine months
after such date will be disallowed to the extent of income on such units are claimed as
tax exempt by the unitholder.
15. Under section 111A of the Act read with section 2(42A), profits and gains arising to
the Company from certain specified transfer of short term capital assets is entitled to
be taxed at a concessional rate of 15% plus applicable Surcharge, Education Cess and
Secondary and Higher Education Cess on income tax.
45
16. Under section 10(38) of the Act read with section 2(42A), profits and gains arising to
the Company from certain specified transfer of long term capital assets is exempt
from tax. However, the income by way of long- term capital gain shall be taken into
account in computing the book profit and income-tax payable under section 115JB of
the Act.
17. Under Section 112 of the Act and other relevant provisions of the Act, long term
capital gains [not covered under section 10 (38) of the Act] arising on transfer of a
long term capital asset, being listed securities, or units, and zero coupon bond, if held
for a period exceeding 12 months, shall be taxed at a rate of 20% (plus applicable
Surcharge, Education al Cess and Secondary & Higher Education Cess on income-
tax) after indexation as provided in the second proviso to section 48 or at 10% (plus
applicable Surcharge, Education al Cess and Secondary & Higher Education Cess on
income-tax) (without indexation), at the option of the assessee.
18. Under section 80G of the Act, the Company is entitled to deduction either for whole
of the sum paid as donation to specified funds or institutions or fifty percent of sums
paid, subject to limits and conditions as provided in the section.
19. Under section 115JAA of the IT Act, the Company is eligible to claim credit for
Minimum Alternate Tax (―MAT‖) paid for any assessment year against normal
income-tax payable in subsequent assessment years. MAT credit shall be allowed for
any assessment year to the extent of difference between the tax payable as per the
normal provisions of the Act and the tax paid under Section 115JB for that assessment
year. Such MAT credit is available for set-off up to 10 years succeeding the
assessment year in which the MAT credit arises.
20. Under section 115-O of the Act, in order to compute the Dividend Distribution Tax
(DDT) payable by the Company, the amount of dividend paid by it would be reduced
by the dividend received by it from its subsidiary company during the financial year:
where the subsidiary is a domestic company and has paid DDT on such
dividend; or
where the dividend is received from a specified foreign company and tax is
payable by the Company under section 115BBD of the Act.
21. Under section 71 read with section 74 of the IT Act, short term capital loss arising
during a year is allowed to be set-off against short term as well as long term capital
gains. Balance loss, if any, shall be carried forward and set-off against any capital
gains arising during subsequent eight assessment years.
22. Under section 71 read with section 74 of the Act, long term capital loss arising during
a year is allowed to be set-off only against long term capital gains. Balance loss, if
any, shall be carried forward and set-off against long term capital gains arising during
subsequent eight assessment years.
B. General Benefits Available to the Company's resident Members/shareholders
1. Under section 10(34) of the Act, dividend (whether interim or otherwise), if any,
received by the Company's shareholders on their investments in Company's equity
shares shall be exempt from tax as the company would be subjected to "Dividend
Distribution Tax" under section 115-O. The expenditure relatable to this income need
to be determined in accordance with the provisions of section 14A of the Act read
46
with rule 8D of the Income Tax Rules, 1962. However, section 94(7) of the Act
provides that the losses arising on account of Sale/transfer of shares purchased up to
three months prior to the record date and sold within three months after such date will
be disallowed to the extent of dividend on such shares are claimed as tax exempt by
the shareholder.
2. Under section 10(38) of the Act, long term capital gain arising to the Company's
shareholders from transfer of its shares held for the period of twelve months or more
is exempt. However, the income by way of long- term capital gain shall be taken into
account in computing the book profit and income-tax payable under section 115JB of
the Act, in case of shares held by limited companies.
3. Under section 111A of the Act, short term capital gains arising to the Company's
shareholders from transfer of its shares will be subject to tax at the rate of 15% (plus
applicable Surcharge, Education al Cess and Secondary & Higher Education Cess on
income tax). Besides, the income by way of short-term capital gain shall be taken into
account in computing the book profit and income-tax payable under section 115JB of
the Act, in case of shares held by limited companies.
4. Under Section 112 of the Act and other relevant provisions of the Act, long term
capital gains [not covered under section 10 (38) of the Act] arising on transfer of
Company's shares, if held for a period exceeding 12 months, shall be taxed at a rate of
20% (plus applicable Surcharge, Education al Cess and Secondary & Higher
Education Cess on income-tax) after indexation as provided in the second proviso to
section 48 or at 10% (plus applicable Surcharge, Education al Cess and Secondary &
Higher Education Cess on income-tax) (without indexation), at the option of the
assessee.
5. Short-term capital loss on sale of Company's shares can be set off against any capital
gain income, long term or short term, in the same assessment year. Such loss can be
set off only against capital gain income and not against any other head of income.
Balance short-term capital loss, if any, can be carried forward up to eight assessments
years. In the subsequent year also, it can be set off against any capital gain income.
6. Under section 54EC of the Act and subject to the conditions and to be extent specified
therein, long term capital gains [not covered under the section 10(38) of the Act]
arising on the transfer of Company's shares will be exempt from capital gains tax
subject to a limit of rupees fifty lakhs if the capital gains are invested within a period
of 6 months during the financial year in which the assets are transferred or within the
subsequent financial year from the date of transfer in the bonds issued by -
National Highway Authority of India constituted under section 3 of National
Highways Authority of India Act, 1988: on or after the 1st day of April 2006.
Rural Electrification Corporation Limited, a company formed and registered
under the Companies Act, 1956 on or after the 1st day of April, 2006.
If only part of the capital gain is so reinvested, the exemption shall be proportionately
reduced. The amount so exempted shall be chargeable to tax subsequently, if the
specified assets are transferred or converted within three years from the date of their
acquisition.
7. Under section 54F of the Act, Long Term Capital Gain arising from transfer of the
Company's shares [not covered under the section 10(38) of the Act] shall be exempt
from tax if net consideration from such transfer is utilised within a period of one year
47
before, or two years after the date of transfer, for purchase of a new residential house,
or for construction of residential house within three years from the date of transfer
and subject to conditions and to the extent specified therein mainly relating to
retention of the acquired asset for a period of 3 years. If only part of the capital gain is
so reinvested, the exemption shall be proportionately reduced.
C. General Benefits Available to Non Resident Indians/Members of the Company other
than FIIs and Foreign Venture Capital Investors
1. Under section 10(34) of the Act, dividend (whether interim or otherwise), if any,
received by the Company's shareholders on their investments in the Company's equity
shares shall be exempt from tax as the Company is subjected to "Dividend
Distribution Tax" under section 115-O. The expenditure relatable to this income need
to be determined in accordance with the provisions of section 14A of the Act read
with rule 8D of the Income Tax Rules, 1962, if the Return of Income is filed in India.
2. Under Section 10(38) of Act, long term capital gain arising to the Company's
shareholders from transfer of its shares held for a period of twelve months or more
shall be exempt from tax.
3. Short -term capital loss on sale of Company's shares can be set off against any capital
gain income, long term or short term, in the same assessment year. It should be noted
that such loss can be set off only against capital gain income and not against any other
head of income. Balance short-term capital loss, if any, can be carried forward up to
eight assessments years. In the subsequent year also, it can be set off against any
capital gain income, if Return of Income is filed in India.
4. Under section 54EC of the Act and subject to the conditions and to be extent specified
therein, long term capital gains [not covered under the section 10(38) of the Act]
arising on the transfer of long term capital assets by the Company will be exempt
from capital gains tax subject to a limit of rupees fifty lakhs if the capital gains are
invested within a period of 6 months during the financial year in which the assets are
transferred or within the subsequent financial year from the date of transfer in the
bonds issued by -
National Highway Authority of India constituted under section 3 of National
Highways Authority of India Act, 1988: on or after the 1st day of April 2006.
Rural Electrification Corporation Limited, a company formed and registered
under the Companies Act, 1956 on or after the 1st day of April, 2006.
If only part of the capital gain is so reinvested, the exemption shall be proportionately
reduced. The amount so exempted shall be chargeable to tax subsequently, if the
specified assets are transferred or converted within three years from the date of their
acquisition.
5. Under section 54F of the Act, Long Term Capital Gain arising from transfer of the
Company's shares [not covered under the section 10(38) of the Act] shall be exempt
from tax if net consideration from such transfer is utilised within a period of one year
before, or two years after the date of transfer, for purchase of a new residential house,
or for construction of residential house within three years from the date of transfer
and subject to conditions and to the extent specified therein mainly relating to
retention of the acquired asset for a period of 3 years. If only part of the capital gain is
so reinvested, the exemption shall be proportionately reduced.
48
6. Under the provisions of section 111A of the Act, capital gains arising to a shareholder
from transfer of Company's shares, entered into in a recognized stock exchange in
India on which securities transaction tax has been paid will be subject to tax at the
rate of 15% (plus applicable Surcharge, Education Cess and Secondary & Higher
Education Cess on income-tax).
7. Under Section 112 of the Act and other relevant provisions of the Act, long term
capital gains [not covered under section 10 (38) of the Act] arising on transfer of
Company's shares, if held for a period exceeding 12 months, shall be taxed at a rate of
20% (plus applicable Surcharge, Education al Cess and Secondary & Higher
Education Cess on income-tax).
8. Under section 115E of the Act, capital gains arising to the non-resident Indian on
transfer of Company's shares held for a period exceeding 12 months shall [in cases
not covered under section 10(38) of the Act] shall be taxed at a concessional rate of
10% (plus applicable Surcharge, Education al Cess and Secondary & Higher
Education Cess on Income-tax) without indexation benefit.
9. Under the provisions of section 115F of the Act, long term capital gains [not covered
under section 10 (38) of the Act] arising to a non-resident Indian from the Company's
shares subscribed to in convertible Foreign Exchange shall be exempt from income
tax if the net consideration is reinvested in specified assets within six months of the
date of transfer. If only part of the net consideration is so reinvested, the exemption
shall be proportionately reduced. The amount so exempted shall be chargeable to tax
subsequently, if the specified assets are transferred or converted into money within
three years from the date of their acquisition.
10. Under the provisions of section 115G of the Act, it shall not be necessary for a non-
resident Indian to furnish his return of income if his only source of income is
investment income or long term capital gains or both and tax deductible at source has
been deducted there from.
11. Under the provisions of section 115H of the Act, a non-resident Indian, on becoming
resident in India in a subsequent year, has an option to be governed by the provision
of Chapter XII-A of the Act viz. ―Special Provisions Relating to certain Income of
Non-Resident".
12. Under the provision of section 115I of the Act, a non resident Indian may elect not to
be governed by the provisions of Chapter XII-A for any assessment year by
furnishing his return of income under section 139 of the Act declaring therein that the
provisions of the Chapter shall not apply to him for that assessment year and if he
does so the provisions of this Chapter shall not apply to him, instead the other
provisions of the Act shall apply.
13. Under section 90(2) of the Act, a non-resident shareholder can claim relief in respect
of double taxation, if any, as per the provision of the applicable double taxation
avoidance agreement entered into by the Government of India with the country of
residence of the non-resident shareholder. The non-resident shareholder has the option
to apply the rates in tax treaty or the Indian tax laws, whichever is beneficial to him.
The benefits under tax treaties are available only if -
tax residential certificate is obtained from the Government of resident
country.
submission of Form 10F by the non-resident to the payer.
49
D. General Benefits Available to Foreign Institutional Investors (FIIs)
1. Under section 10(34) of the Act, dividend (whether interim or otherwise), if any,
received by the FIIs on their investments in the Company's equity shares shall be
exempt from tax as the Company is subjected to "Dividend Distribution Tax" under
section 115-O. The expenditure relatable to this income need to be determined in
accordance with the provisions of section 14A of the Act read with rule 8D of the
Income Tax Rules, 1962, if the Return of Income is filed in India.
2. Under Section 10(38) of Act, long term capital gain arising to the Company's
shareholders from transfer of its shares held for a period of twelve months or more
shall be exempt from tax.
3. Under section 111A of the Act, the income realized by FIIs on sale of the Company's
shares by way of short term capital gains referred to in Section 111A of the Act would
be taxed at the rate of 15% (plus applicable Surcharge, Education Cess and Secondary
& Higher Education Cess on income-tax).
4. Under section 90(2) of the Act, a non-resident shareholder can claim relief in respect
of double taxation, if any, as per the provision of the applicable double taxation
avoidance agreement entered into by the Government of India with the country of
residence of the non-resident shareholder. The non-resident shareholder has the option
to apply the rates in tax treaty or the Indian tax laws, whichever is beneficial to him.
The benefits under tax treaties are available only if -
tax residential certificate is obtained from the Government of resident
country.
submission of Form 10F by the non-resident to the payer.
E. Benefits available to Mutual Funds
The Mutual Funds whose income is exempt under the provisions of section 10(23D) of the
Act, would be entitled to exemption in respect of income from investment in the Company's
shares also.
Under The Wealth Tax Act, 1957
Shares of the Company held by the shareholder will not be treated as an asset within the
meaning of section 2(ea) of Wealth-tax Act, 1957 and as such Wealth-tax Act will not be
applicable.
Notes
1. All the above benefits are as per the current tax law and will be available only to the
sole/first named holder in case the shares are held by joint holders.
2. The above Statement of Possible Direct Tax Benefits sets out the provisions of law in
a summary manner only and is not a complete analysis or listing of all potential tax
purchase, ownership and disposal of shares.
3. In respect of non-residents and foreign companies, the tax rates and consequent
taxation mentioned above will be further subject to any benefits available under the
Tax Treaty, if any, between India and the country in which the non-resident has fiscal
50
domicile. As per the provisions of section 90(2) of the Act, the provisions of the Act
would prevail over the provisions of the Tax Treaty to the extent they are more
beneficial to the non-resident. In case the non-resident has fiscal domicile in a country
with which no Tax Treaty exists, then due relief under Section 91 of the Act may, in
given circumstances, be available.
4. Under the first proviso to section 48 of the Act, the non-resident Indian defined in
section 115C(e) of the Act will be compensated for the lower earning in foreign
currency on account of the fall in the value of the Indian rupee.
5. Our views expressed herein are based on the facts and assumptions indicated by the
Company. No assurance is given that the revenue authorities/courts will concur with
the views expressed herein. Our views are based on the existing provisions of law and
its interpretation, which are subject to change from time to time. We do not assume
responsibility to update the views consequent to such changes. The views are
exclusively for the use of the Company. We shall not be liable to the Company for
any claims, liabilities or expenses relating to this assignment except to the extent of
fees relating to this assignment, as finally judicially determined to have resulted
primarily from bad faith or intentional misconduct. We will not be liable to any other
person in respect of this statement.
-o0o-
51
SECTION IV – ABOUT US
XIII. HISTORY OF OUR COMPANY AND CERTAIN CORPORATE MATTERS
The Company was incorporated on 12 August 2013 under the provisions of the Companies
Act under the name and style of Greenlam Industries Limited with corporate identity number
(CIN) U21016AS2013PLC011624 having registered office situated at Makum Road,
Tinsukia, Assam - 786125. The Company obtained certificate of commencement of business
on 16 August 2013.
The main objects of the Company as set out in its Memorandum of Association are as
follows:
―To carry on business as manufacturers, traders, exporters, importers, dealers, wholesalers,
retailers, service providers, commission agents, of laminates of all sizes and descriptions,
veneers, pre-laminated board, decorative laminates, decorative laminated sheets, high
pressure laminates, post forming laminates, decorative veneers, ready to install doors, high-
end doors, high-end veneered engineering flooring and pre-laminated particle board of all
kinds and descriptions and other paper based, wood based and plastic based products of all
kinds and descriptions and industrial laminated sheets, compact laminates of every
descriptions, post formed panels, whether laminated or not, restroom cubicles, lockers and
every type of partition systems and to act decorators and manufacturers and deal in housing
furniture and fittings, interior decorators, commercial and industrial furniture and fittings
and implements and tools of all descriptions and provide consultancy in total interior and
exterior decoration and furniture solution.‖
Changes in Memorandum and Articles of Association
Since incorporation, the Company has once amended its Memorandum of Association in
order to amend the ‗Authorised Share Capital‘ clause to record the increase in authorised
share capital of the Company to INR 150,000,000 (Indian Rupees One Fifty Million only)
divided into 30,000,000 (Thirty Million) Equity shares of INR 5 (Indian Rupees Five Only)
each, vide ordinary resolution of the shareholders of the Company passed at its annual general
meeting held on 30 October 2014. Furthermore, the Company has vide its annual general
meeting held on 30 October 2014 adopted new set of Articles of Association.
Subsidiaries
As on the date of submission of this Information Memorandum, following are the subsidiaries
of our Company:
1. Greenlam Asia Pacific Pte. Limited (registered in Singapore),
2. Greenlam America, Inc. (registered in USA),
3. Greenlam Europe (UK) Limited (registered in UK),
4. Greenlam Asia Pacific (Thailand) Co. Limited (registered in Thailand),
5. Greenlam Holding Co. Limited (registered in Thailand),
6. PT. Greenlam Asia Pacific (registered in Indonesia) and
7. Greenlam VT Industries Private Limited (registered in India).
Note: Company is taking necessary actions in relation to RBI compliances with respect to the
overseas subsidiaries.
GREENLAM ASIA PACIFIC PTE. LTD.
Corporate Information
52
Greenlam Asia Pacific Pte. Ltd. was incorporated on 21 March, 2005 in Singapore and is
engaged in the business of trading of plywood, high pressure decorative laminates and allied
products.
Interest of our Company in Greenlam Asia Pacific Pte. Ltd.
Our Company holds 24,30,642 ordinary shares of Singapore $1 each in Greenlam Asia
Pacific Pte. Ltd. representing 100 % (one hundred percent) of the issued, subscribed and paid-
up capital.
Issued, subscribed and paid-up share capital of Greenlam Asia Pacific Pte. Ltd. is Singapore $
4,30,642 divided into 24,30,642 ordinary shares of Singapore $1 each.
Board of Directors
1. Mr. Saurabh Mittal, Managing Director
2. Mr. Tham Chin Kuo, Director
Financial Information
(Rs. in lacs)
Particulars For the year
ended
31.03.2014
For the year
ended
31.03.2013
For the year
ended
31.03.2012
Equity capital 1,156.61 1,062.54 174.47
Reserves & Surplus (31.22) (44.06) (35.66)
Net worth 1,125.39 1,018.48 138.81
Turnover/ sales 17,512.47 13,724.94 13,296.19
Profit after tax 16.73 (5.58) 77.94
EPS (Rs.) 0.69 (0.23) 18.10
Book Value per share (Rs.) 46.30 41.90 32.23
GREENLAM AMERICA INC.
Corporate Information
Greenlam America Inc. was incorporated on 23 April, 2008 in USA and is engaged in the
business of marketing and distribution of decorative laminates of the highest quality and high-
pressure laminates in North and South America.
Interest of our Company in Greenlam America Inc.
Our Company holds 16,00,000 Shares of USD 1 each in Greenlam America Inc., representing
100 % of the issued, subscribed and paid-up capital.
Issued, subscribed and paid-up share capital of Greenlam America Inc. is USD 16,00,000
divided into 16,00,000 shares of USD 1 each.
Board of Directors
Mr. Saurabh Mittal
Financial Information
(Rs. in lacs)
53
Particulars
For the year
ended
31.03.2014
For the year
ended
31.03.2013
For the year
ended
31.03.2012
Equity capital 958.24 868.48 814.02
Reserves & Surplus (724.50) (908.07) (1202.17)
Net worth 233.74 (39.59) (388.15)
Turnover/ sales 4,558.67 4,623.79 3,529.91
Profit after tax 277.42 374.54 55.06
EPS (Rs.) 17.34 23.41 3.44
Book Value per share (Rs.) 14.61 (2.47) (24.26)
GREENLAM EUROPE (UK) LIMITED
Corporate Information
Greenlam Europe (UK) Limited was incorporated on 19 September 2012 in UK and is
engaged in the business of marketing and distribution of high-pressure laminates in European
Union.
Interest of our Company in Greenlam Europe (UK) Limited
Our Company holds 1 (one) Ordinary Share of GBP 1 each in Greenlam Europe (UK)
Limited and 1,88,279 Ordinary shares of GBP 1 each is held by Greenlam Asia Pacific Pte.
Ltd., a wholly owned subsidiary of the Company, representing 100 % of the issued,
subscribed and paid-up capital.
Issued, subscribed and fully paid-up ordinary share capital of Greenlam Europe (UK) Limited
is GBP 1,88,280 divided into 1,88,280 ordinary shares of GBP 1 each.
Board of Directors
Mr. Saurabh Mittal
Financial Information
(Rs. in lacs)
Particulars For the year
ended
31.03.2014
For the year
ended
31.03.2013
For the year
ended
31.03.2012
Equity capital 187.88 0.00 -
Reserves & Surplus (399.50) (18.46) -
Net worth (211.62) (18.46) -
Turnover/ sales 231.58 - -
Profit after tax (377.16) (18.46) -
EPS (Rs.) (200.31) (18,45,642.69) -
Book Value per share (Rs.) (112.39) (18,45,560.26) -
GREENLAM ASIA PACIFIC (THAILAND) COMPANY LIMITED
Corporate Information
Greenlam Asia Pacific (Thailand) Company Limited was incorporated on 20 November 2009
in Thailand and is engaged in the business of importing and trading of laminates and other
interior materials including marketing and distribution of high-pressure laminates in Thailand.
54
Interest of our Company in Greenlam Asia Pacific (Thailand) Company Limited
Our Company does not directly hold any shares in Greenlam Asia Pacific (Thailand)
Company Limited.
19,000 Ordinary shares of THB 100 each is held by Greenlam Asia Pacific Pte. Ltd., a wholly
owned subsidiary of the Company, representing 47.5 % of the issued and paid-up capital and
20,000 Ordinary shares of THB 100 each is held by Greenlam Holding Co., Ltd, a subsidiary
of Greenlam Asia Pacific Pte. Ltd. representing 50% of the issued, subscribed and paid-up
capital.
Authorised Share Capital of Greenlam Asia Pacific (Thailand) Company Limited is Baht
4,000,000 divided into 40,000 ordinary shares of Baht 100 each.
Issued, subscribed and paid-up share capital of Greenlam Asia Pacific (Thailand) Company
Limited is Baht 4,000,000 divided into 40,000 ordinary shares of Baht 100 each.
Board of Directors
1. Mr. Saurabh Mittal
2. Mrs. Roongnapha Bunnag
Financial Information
(Rs. in lacs)
Particulars For the year
ended
31.03.2014
For the year
ended
31.03.2013
For the year
ended
31.03.2012
Equity capital 73.99 74.10 65.98
Reserves & Surplus 60.84 31.35 (45.45)
Net worth 134.83 105.45 20.53
Turnover/ sales 7,580.72 5,923.96 4,028.93
Profit after tax 29.54 82.39 (5.48)
EPS (Rs.) 73.85 205.98 (13.70)
Book Value per share (Rs.) 337.07 263.62 51.33
GREENLAM HOLDING CO. LIMITED
Corporate Information
Greenlam Holding Co. Limited was incorporated on 20 November 2009 in Thailand and is
engaged in the business of marketing and distribution of high-pressure laminates in Thailand
and also to purchase, procure, occupy, modify or manage the assets.
Interest of our Company in Greenlam Holding Co. Limited
Our Company does not directly hold any shares in Greenlam Holding Co. Limited.
4,900 Ordinary shares of THB 100 each is held by Greenlam Asia Pacific Pte. Ltd., a wholly
owned subsidiary of our Company, representing 49% of the issued, subscribed and paid-up
capital and 5,000 Ordinary shares of THB 100 each is held by Greenlam Asia Pacific
(Thailand) Co., Ltd, a subsidiary of Greenlam Asia Pacific Pte. Ltd. representing 50% of the
issued, subscribed and paid-up capital.
55
Authorized Share Capital of Greenlam Holding Co. Limited is Baht 10,00,000 divided into
10,000 ordinary shares of Baht 100 each.
Issued, subscribed and paid-up share capital of Greenlam Holding Co. Limited is Baht
10,00,000 divided into 10,000 ordinary shares of Baht 100 each.
Board of Directors
1. Mr. Saurabh Mittal
2. Mrs. Roongnapha Bunnag
Financial Information
(Rs. in lacs)
Particulars
For the year
ended
31.03.2014
For the year
ended
31.03.2013
For the year
ended
31.03.2012
Equity capital 18.50 18.52 16.50
Reserves & Surplus (6.26) (4.69) (2.45)
Net worth 12.24 13.83 14.05
Turnover/ sales - - -
Profit after tax (1.58) (1.93) (1.09)
EPS (Rs.) (15.80) (19.34) (10.90)
Book Value per share (Rs.) 122.38 138.33 140.46
PT. GREENLAM ASIA PACIFIC
Corporate Information
PT. Greenlam Asia Pacific was incorporated on 5 June, 2012 in Indonesia and is engaged in
the business of manufacture of promotional material i.e. catalogues, sample folders, chain
sets, wall hooks, A4 size samples.
Interest of our Company in PT. Greenlam Asia Pacific
Our Company does not directly hold any shares in PT Greenlam Asia Pacific.
2,47,500 Ordinary shares of Indonesian Rupiah (IDR) 9,280 (USD 1) each is held by
Greenlam Asia Pacific Pte. Ltd., a wholly owned subsidiary of the Company, representing 99
% of the issued and paid-up capital and 2,500 Ordinary shares of IDR 9,280 (USD 1) each is
held by Mr. Saurabh Mittal representing 1% of the issued, subscribed and paid-up capital.
Issued, subscribed and fully paid-up ordinary share capital of PT Greenlam Asia Pacific is
IDR 2,320,000,000 (USD 2,50,000) divided into 2,50,000 ordinary shares of IDR 9,280 (USD
1) each.
Board of Directors
Mr. Umakant Tiwari, Director
Financial Information
(Rs. in lacs)
Particulars
For the year
ended
For the year
ended
For the year
ended
56
31/03/2014 31/03/2013 31/03/2012
Equity capital 128.05 134.70 -
Reserves & Surplus (1.56) (20.24) -
Net worth 126.49 114.46 -
Turnover/ sales 118.27 48.98 -
Profit after tax 17.68 (20.24) -
EPS (Rs.) 6.80 (7.80) -
Book Value per share (Rs.) 48.68 44.08 -
GREENLAM VT INDUSTRIES PRIVATE LIMITED
Corporate Information
Greenlam VT Industries Private Limited was incorporated on 23 August 2013 in India with
an object to engage in the business of manufacturing and trading of Doors and High-end
Doors & allied products. The Company has not started any business till date.
Interest of our Company in Greenlam VT Industries Private Limited
Our Company holds 10,000 Equity Shares of Rs.10/- each in Greenlam VT Industries Private
Limited representing 100 % of the issued, subscribed and paid-up capital.
Authorised Share Capital of Greenlam VT Industries Private Limited is Rs.10,00,000/-
divided into 1,00,000 equity shares of Rs. 10/-each.
Issued, subscribed and fully paid-up share capital of Greenlam VT Industries Private Limited
is Rs. 1,00,000 divided into 10,000 equity shares of Rs. 10/-each.
Board of Directors
1. Mr. Shiv Prakash Mittal
2. Mr. Saurabh Mittal
Financial Information
(Rs. in lacs)
Particulars
For the year
ended
31/03/2014
For the year
ended
31/03/2013
For the year
ended
31/03/2012
Equity capital 1.00 - -
Reserves & Surplus (0.27) - -
Net worth 0.73 - -
Turnover/ sales - - -
Profit after tax (0.27) - -
EPS (Rs.) (2.70) - -
Book Value per share (Rs.) 7.30 - -
Shareholder’s Agreement
There exists no separate agreement executed between any shareholder and the Company.
57
XIV. INDUSTRY OVERVIEW
(The information in this section is derived from various publicly available sources and other industry sources. This information has not been independently verified by us or respective legal or
financial advisors, and no representation is made as to the accuracy of this information. Industry
sources and publications generally state that the information contained therein has been obtained from sources generally believed to be reliable, but their accuracy, completeness and underlying
assumptions are not guaranteed and their reliability cannot be assured and accordingly,
investment decisions should not be based on such information.)
Indian laminates industry has been consistently growing since last six to seven years. The last
two years have been a boom time for mushrooming of new laminate units. As per latest
estimates, India has now more than 165 laminate producing establishments that include all
kinds of laminates. It includes all types of Laminates categories – decorative & non-
decorative panels. Since two years the economy has been slow and Indian laminates industry
has been also affected up to an extent. Despite this, many existing players, who have strong
market presence expanded capacities and various new players erected new laminates
producing facilities that kept the industry expansion growth bound. Total production of 1.35
crore (13.5 million) to 1.40 crore (14 million) sheets every month in the country that includes
export and domestic market. The Laminates production capacity has been growing year on
year. In terms of number of sheets, the production has seen a growth of above 12%
approximately since 2010. With growth in decorative laminates demands during 2011 & 2012
by snatching up some share of reconstituted veneers and from the furniture industry
(laminates are being used instead of painting the inside areas of furniture), laminates noticed
around 14% growth. After that growth in demand has been slow in domestic market but the
number in exports, liner grade and 1.0 mm textures has maintained a fair growth enough to
fuel production capacity expansions. Now with highly competitive 1.0 mm domestic market,
the capacities that are being added are largely absorbed by the ―liner grade or 0.6‖ and lower
thickness material.
The average production of decorative laminates has crossed approximately 130 million sheets
inclusive of all thicknesses but the gap between installed capacity and demand is growing
bigger. The mid segment category is very important fraction of the decorative laminate
segment as it holds 20 percent of the market share according to volume share or value, both.
This category is also including few of those players who are very popular in trade with their
economical pricing but are regarded as a brand. The Indian laminate Industry and trade is
estimated to be of Rs. 4800 crores per annum in India. The reasons are positive sentiments,
Emerging new areas and demand in already growing cities with new Government and
growing commitment to work for social growth. The Indian laminates market is now being
dominated by Top brands & Medium segment players. The Top brands hold approximately
41% in overall share including domestic & export markets but it holds only 34 percent share
in domestic market. The domestic market is mainly led by unorganized category players who
holds around 45 percent market share of Indian decorative laminate volumes. But the value
analysis clearly reflects the dominance of top brands which holds more than half of the
market share in laminates category. The mid Segment is almost on similar ratio be it volume
wise (No. of sheets sold per month) or value wise.
(Source: By Big Sea Marcom Pvt. Ltd. published in the Ply Reporter Special Issue)
Industry structure and development
Indian furniture industry
India‘s organised furniture industry is estimated at around US$8 billion and expected to grow
at a CAGR of about 25-30 per cent annually. The modular furniture market in India was
58
estimated to be about US$ 160 million (Source: http://www.termpaperwarehouse.com/essay-
on/Indian-Furniture-Retai-Industryl/299449). The above Laminate market in India is around Rs
4,800 crores and expected to grow around 1.5 times the GDP growth rate.
India‘s furniture market was concentrated in Tier-I, Tier-II and Tier-III cities; the leading 784
urban centres contributed 41 per cent to the total consumer furniture market; Tier-I and Tier-
II cities accounted for 33 per cent of the total market.
Furniture consumption in India recorded 10 per cent average annual growth over the last
decade, reaching about US$ 15 billion in 2013 at retail prices. India‘s organized furniture
sector is marked by about 5,000 companies and nearly 10,500 importers. India imports around
US$150 million worth of furniture, catering primarily to urban affluent households. India‘s
interior decor industry is heading towards high-end, low maintenance, quickly installable and
customisable products. Branded furniture accounts for a 30 per cent market share in India.
IKEA announced intentions of investing Rs.10,500 crore (1.2 billion euro) following the
recent policy change which permitted 100 per cent foreign direct investment (FDI) in single-
brand retail, which can potentially widen the sector.
Opportunities and threats
Growth drivers of the industry
Rising proportion of working age population: India's median age of 24 makes it a young
country with a large productive workforce. Nearly two-third of India‘s population is in the
working age group from 15-64 years marked by financial independence, aspirations and
access to growing disposable incomes.
(Source: Report dated January 2014 of Dinodia Capital Advisors on “Indian Tourism and Hospitality
Industry; Rising ahead of the Overcast”)
Rising urbanisation: India has the highest urban population rate of change among BRIC
nations. The country‘s urban population accounted for 31.6 per cent of its total population in
2012. In 2010-15, the country‘s urban population is expected to grow 2.5 per cent above the
1.3 per cent growth in the total population. At this rate, it is estimated that around 843 million
people will live in Indian cities by 2050, offering growing opportunities for its real estate and
furniture sector.
59
Rising consumer class: By 2020, India is projected to emerge as the world's third largest
middle-class consumer market behind China and the US. By 2030, India is likely to surpass
both countries with an aggregate consumer spend of nearly US$ 13 trillion. Rising middle-
class incomes are driving consumer aspirations as people seek higher quality products and
services (Source: http://www.moneycontrol.com/news/business/indian-consumer-biz-to-be-worlds-
largest-by-30-deloitte_833295.html?utm_source=ref_article)
Rising nuclear families: Some 56 per cent of urban Indian households comprise four or less
members, a marked change from the position 10 years ago, when the urban median household
size was between four and five members. With 49.7 per cent of all Indian households having
four or less members, the median Indian household has just a fraction over four
members. Nuclear families are the overwhelming norm in India, with 70 per cent of
households comprising just one married couple. This increasing nuclearisation has triggered
the need for quality housing (Source: http://timesofindia.indiatimes.com/india/Median-household-
size-drops-below-4-in-cities/articleshow/12397117.cms)
Consumer Choices: There is a major change in the consumer preference due to which there
is a major shift from unbranded/unorganized sector to branded products. Being a major
branded company in the segment we will be benefitted out of this change.
Threats
Competition from both unorganised and other organised players, leading to
difficulties in improving market share
Cheaper imports in certain product categories.
Outlook
Rising population, growing aspirations and rapid urbanisation have strengthened the demand
for residential property in India, registering a significant growth of more than 40 per cent by
end-2014. (Source : http://www.rncos.com/Press_Releases/Increasing-Nuclear-Families-Driving-
Housing-Demand.htm)
(Source: http://www.moneycontrol.com/news/real-estate/property-forecast-for-2014-
makaancom_996387.html)
60
Hospitality sector: Over 300 hotels are expected to be commissioned in India over the next
three years, constituting about 17 per cent of Asia‘s hotel construction pipeline. India has the
second largest number of hotels (292) under construction after China (592) (Source: Indian
Tourism and Hospitality Industry Report by Dinodia Capital Advisors, January 2014.) By 2015, the
Indian hospitality industry is estimated at Rs 230 billion, growing at a robust 12.2% CAGR. (Source: http://www.researchandmarkets.com/reports/2017977/industry_insight_indian_hotels)
Healthcare: India‘s healthcare sector is expected to grow from US$78.6 billion in 2012 to
US$158.2 billion in 2017. India‘s per capita healthcare expenditure has increased at a CAGR
of 10.3 per cent from US$43.1 in 2008 to US$57.9 in 2011 and is expected to rise to US$88.7
by 2015 with substantial demand for high-quality and speciality healthcare services in Tier-II
and Tier-III cities. (Source: http://articles.economictimes.indiatimes.com/2013-12-
02/news/44657410_1_healthcare-sector-healthcare-delivery-fortis)
Office space: India‘s commercial office space has evolved significantly over the last decade
driven largely by its service sector. Office space absorption is likely to rise 7 per cent in 2014
to 29 million square feet across India's seven major cities. Absorption was pegged at 27
million square feet in 2013 across seven major cities. The Indian economy is projected to
grow faster in 2014, generating higher real estate demand. (Source:
http://articles.economictimes.indiatimes.com/2014-03-23/news/48491623_1_office-space-demand-dtz-
office-rentals)
Residential real estate: The number of high-end residential launches grew 142 per cent
during April-December, 2013 compared to the corresponding period of the previous year,
catalysed by the incidence of high net worth individuals shifting from independent houses to
apartments. (Source: http://businesstoday.intoday.in/story/slowdown-developers-still-bet-on-high-
end-residential project/1/200399.html)
Retail space: The supply of organised retail real estate, which was concentrated in Tier- I
cities until a few years ago, extended to Tier-II and Tier-III cities. Within retail real estate, the
total shopping mall stock is likely to reach 87.7 million sq ft by 2014, representing an
addition of 11.7 million square feet, double of the previous fiscal across the seven prominent
cities of the country. During 2013, these cities logged an estimated supply of around 5.2
million square feet, taking the total shopping mall stock to 76 million square feet. The average
mall size of around 3,80,000 square feet (2014) is expected to increase to 6,60,000 square feet
(2017). (Source: http://articles.economictimes.indiatimes.com/2014-01-02/news/45799602_1_sq-ft-
estimated-supply-tenant-mix)
61
XV. BUSINESS OVERVIEW
Decorative Business
Our Company‘s current business is resultant of de-merger of the Decorative business of
Greenply Industries Limited pursuant to the Composite Scheme of Arrangement. Post the said
Scheme, our Company‘s business has been designed to be an interior infrastructure company
engaged in the manufacture of laminates, decorative veneers and their allied products and are
one of the largest in India in the segments in which we operate.
Our products and installed capacities are as follows:
Manufacturing Unit
Product
Installed
Capacity
Our major brands
Behror, Rajasthan Laminates 5.34 million
sheets
Greenlam, Green touch,
Green Gloss, Greenlam
Supertuf, New Mika,
Sturdo, Green Decowood,
Clads, Mikasa, MFC
Decorative
veneers
4.20 million
sqm
Engineered
Wood
Flooring
1.00 million
sqm
Prelaminated
Particle Board
30,000 CBM
Nalagarh, Himachal Pradesh Laminates 4.68 million
sheets
We have been awarded with ISO 9001, ISO 14001 and OHSAS 18001 certifications for our
manufacturing facilities at Behror and Nalagarh. We have also received Greenguard
Certification for ―Low Emitting Products and Materials‖ for our product Greenlam
Laminates.
We have a pan-India presence and export our laminate products to various countries
including the United States of America, Europe, Russia, United Kingdom, Israel, Middle East
Countries, Singapore, Thailand, Malaysia, Taiwan, Hong Kong.
Competitive strengths
We are a performance driven company with a strong focus on customer satisfaction.
We believe our competitive strengths are:
(a) Extensive distribution network
Our distribution network ensures our product availability to our customers translating into
efficient supply chain, focused customer service and short turnaround times for product
delivery. Our dealer base is supported by an efficient sub dealer and distribution network and
sales team, leading the products to retail outlets and making our products available on the
shelf across most places at all times thereby reducing dealer stock levels and increased annual
sales per dealer.
(b) Strong brand recall
62
The laminates industry is a fragmented and an unorganized industry. We believe we have
pioneered and created a niche for ourselves in this industry by introducing various brands. We
believe our brands Greenlam, New Mika and Green Decowood are synonymous with quality
assurance in terms of strength and durability. We have been able to sustain the demand for
our brands by offering a continuous flow of value additions such as new designs and finishes.
We believe that our products enjoy easy recall and help us enhance our market share. Our
brands give us a broader platform to market our products to our customers. Our ―Dikhane Ka
Jee Kare‖ campaign in FY 2007-08, ―Zamane ko Sajana Hai‖ in 2012 and ―Assembly Hall‖
in 2013 TVC have enabled us to gain a strong top of the mind recall with our customers.
(c) Proven and experienced management team
Our Promoter has over 15 years of experience in the industry. We believe that our senior
management team has extensive experience in the commissioning of and operating
manufacturing capacities, finance, sales, business development and strategic planning in the
industry. The vision and foresight of our management enables us to explore and seize new
opportunities and accordingly position ourselves to introduce new products to capitalize on
the growth opportunities in the interior infrastructure sector. We believe that the demonstrated
ability and expertise of our management team for committed asset investment and use of
cutting-edge technology results in growing capacities and rising production levels with better
cost management and enhanced process efficiency has translated into our quality product,
increasing profitability and improved margins which gives us a competitive edge.
(d) Cost efficient sourcing and locational advantage
We believe that our cost efficient manufacturing and supply chain management results in a
significant reduction in our operational costs. With our experience, we are able to time our
procurement of raw materials and being a large player in the industry we are also able to
source these materials at a competitive price. The location of our current manufacturing
facilities gives us a significant competitive cost advantage in terms of raw material sourcing,
manufacturing and labour costs.
The key raw materials for the manufacture of our products are various types of papers and
chemicals. Kraft paper required for laminate manufacture is primarily sourced from the
neighboring states of Uttar Pradesh and Uttarakhand. Designs and major chemicals are
imported through ports in Western India- the Behror unit at Rajasthan enjoys proximity to
Western India which results in lower logistic costs.
Our manufacturing units are located in states we believe offers potential market for our
products thus reducing the logistical costs associated with delivery. The strategic location of
our units at Rajasthan and Himachal Pradesh also helps to market the product in the
neighboring Delhi-NCR and North and West India.
(e) Our global sales and marketing network
We have focused on growing our international reach and now have presence in more than 70
countries, directly or through three subsidiaries of the Company. We are enhancing our global
presence by offering customer better product varieties and quality at economical prices. The
Company has added several high value products such a compact laminate, exterior façade
laminates, high gloss laminates in its basket to offer a complete bouquet of decorative
products to its customers.
(f) Product Portfolio
The Company has a wide range of products to cater to all the demand segments. Its products
63
range from economy category to latest and exclusive designs and finishes. We offer laminates
in various dimensions and thicknesses in over 2,000 designs.
Our Business Strategy
Capacity expansion and manufacture of new products
The Company has entered into the manufacture of engineered wood flooring, by investing a
sum of Rs. 120 crores in 1 million square meter capacity. This product aims to be an import
substitution since at present almost all of the demand in India for wood flooring is met with
imports. We will leverage our existing distribution network to market this product across
India. Global market for this product is very huge which is approximately 120 million square
meters. The market in India for this product is around 2.5 million square meters and we are
optimistic that it will grow at the rate of 25% annually. This product has a huge replacement
potential. We are also engaged in the addition of pre-laminated particle boards to our portfolio
to complement the marketing of high pressure laminates and enhancing our OEM presence.
The Company has approved the setting-up of an engineered door manufacturing unit at
Behror, Rajasthan with an annual manufacturing capacity of 1,20,000 engineered door sets
and door leafs with a capital cost of approximately Rs. 27 crores. Further, the Company has
also approved expansion of the manufacturing capacity of laminates at its unit located in
Nalagarh, Himachal Pradesh for manufacturing an additional 2 million laminate sheets per
annum with a capital cost of approximately Rs. 20 crores for such expansion.
To continue brand building and strengthening of the distributor network
The industry is seeing a shift in market share from the unorganised to the organised sector.
We seek to capture a greater market share in this environment and it is important to invest in
the brand to strengthen the top of the mind recall and consequently we shall continue to invest
in our brands.
Since the industry is highly unorganized, a good distribution network is essential in this
industry. We are focusing on expanding on our distributorship network by opening new
marketing offices or by way of appointment of new distributors, including smaller towns and
rural areas. We believe that smaller towns in suburban India would be the new emerging
realty hubs for development of residential and commercial complexes and intend to position
ourselves to capitalize on these emerging opportunities.
Product Innovation
Our Company is continuously working towards innovating new products in the premium and
economy category. We have launched Exterior Grade Laminates, Bacteria Resistant
Laminates, High Gloss Laminates in the premium range.
Newer Markets
Our Company has presence in more than 70 countries of the world. We are planning to make
our products available in more countries by expanding our network and reaching new
countries. Newer products in our portfolio are helping us in this regard. In respect of the
countries in which we are already present, we are expanding our network by going into more
locations.
64
Our products:
Our product portfolio is comprised of:
Laminates and allied products
Laminates are used as surfacing materials for paneling, partitioning, furniture, table tops and work
surfaces. Special purpose high pressure laminates includes cabinet liners, high-wear, fire-rated,
electrostatic dissipative and chemical resistant laminates. Compact laminates are widely used in
restroom cubicles, lockers, kitchen shutters and partitions. Another product in this category is pre-
laminated particle board, which is used in office furniture, readymade furniture and in partitions.
Decorative Veneers and allied products
Decorative veneers are used as surfacing materials for high-end residential, office furniture and
paneling. Engineered wood flooring is used as a high end surfacing and flooring solution.
Laminates and allied products
Raw Materials
The principal raw material used in the manufacture of laminates comprises of kraft and decorative
paper, phenol and melamine. Kraft paper is sourced domestically and we import high-end and
premium decorative papers from Japan, Germany, France and other EU nations. The two principal
chemicals required for the manufacture of laminates, phenol and melamine are sourced both from
domestic as well as overseas markets depending upon the price and credit terms.
Manufacturing Process
High Pressure Decorative Laminate Production Process Flow Chart
65
Engineered Wood Flooring
Raw Materials
The principle raw materials used in the manufacture of engineered wood flooring comprises of
decorative veneers of various thicknesses, pine wood, high density fibre (HDF) boards and various
chemicals used for bonding and polishing.
Manufacturing Process
`
Precut
LamellaKD. TIMBER HDF BOARD
UF Glue Top Lamella
Manufacturing
PVA GLUERIP SAW BEAM SAW
Existing Hot Press-
2nd Phase
Putty Filling
& QCConditioning
for 24 Hrs
Bottom
Calibration
SanderInspection.
KD Pine
Block2/3 Strip
lamella Prod.
Layup & Pressing line Balancing
Veener
BOTH Side
Glue Spreader
Reject
/Rework
Reject
/Rework
DESPATCH
Packing line COATING WaxingDET Long &
Cross
QC Inspection
Finish Goods Storage
HAND
SCRAPING
Top Layer
CalibrationQC Inspection
MARKET
66
Decorative Veneer
Raw Materials
The raw materials required for the manufacture of decorative veneer are plywood, veneers and
chemical resins.
The plywood used in the manufacture of decorative veneer is imported from Myanmar, while the
veneers are imported from the Germany and Italy.
Manufacturing Process
Timber Block Beam Beam Boiling
Slicing
Grading Veneer Grouping Head
Cutting Edge
Cutting
Splishing End
Tapping Gluing of Base Ply
Assembling Pressing
(Hot Press)
Edge Triming
Hand Finishing
Sanding Quality Check
Final Grading
Making (Branding)
Packing Dispatch /Loading
67
Marketing
Our Company has always endeavored to create brand equity for all its stakeholders with its marketing
and brand building initiatives. Responsible, focused and consistent efforts are continuously being
made to strengthen our brand recall. Right communication strategy have been planned to ensure
maximum exposure, through various channels including television, radio, print, outdoor, digital, direct
mailers etc. The perfect mix of unique and innovative products and strategically creating its demand
in the market has resulted in top of the mind recall of its flagship brands Greenlam, Newmika and
Decowood.
Human Resource
Our Company emulates best HR practices and standards. We have a 360 degree HR approach which
includes training, progressive and performance driven remuneration, talent retention and nourishment,
work-life balance programs. We believe in offering a plethora of experiences to our employees, who
are ready to take up a challenge. In line with this tenet, we enable our employees to choose from these
experiences a meaningful learning environment so as to make the most out of the time spent on each
assignment. These experiences when supported by a powerful work life balance policy make the
overall journey both consequential as well as pleasurable.
Internal control systems
The Company has in place robust internal control procedures commensurate with its size and
operations. The Board of Directors, insofar as it is responsible for the internal control system, sets the
guidelines, verifying its adequacy, effectiveness and application. The Company‘s internal control
system is designed to ensure management efficiency, measurability and verifiability, reliability of
accounting and management information, compliance with all applicable laws and regulations, and
the protection of the Company's assets and so that the main company risks (operational, compliance-
related, economic and financial) are properly identified and managed over time.
Intellectual Property
We have various trademarks, copyrights and patent.
Competition
The laminates industry is highly fragmented. The unorganized sector offers its products at highly
competitive prices. We also face stiff competition from the organized sector.
68
XVI. OUR MANAGEMENT
The overall management is vested in the Board of Directors, comprised of qualified and experienced
persons and the day-to-day business operations are managed by the managing director and the chief
executive officer under the general superintendence and control of the Board of Directors.
Board of Directors as on date of filing the Information Memorandum
Name, Designation and Address
Date of
Appointment
Other Directorships
Name: Mr. Shiv Prakash Mittal
Designation: Non-Executive
Chairman
Address: Flat No.2NW, 5 Queens
Park, Kolkata-700 019
DIN: 00237242
12 August 2013 Greenply Industries Limited
Prime Holdings Private Limited
Greenlam VT Industries Private
Limited
Name: Mr. Saurabh Mittal
Designation: Managing Director and
CEO
Address: 66, Anadalok, Khel Gaon
Road, New Delhi-110 049
DIN: 00273917
12 August 2013 Greenlam America Inc., USA
Greenlam Asia Pacific (Thailand)
Co. Ltd.
Greenlam Asia Pacific Pte. Ltd.,
Singapore
Greenlam Europe (UK) Ltd. UK
Greenlam Holding Co. Ltd.,
Thailand
Greenlam VT Industries Pvt. Ltd.
Greenply Leasing & Finance Pvt.
Ltd.
Himalaya Granites Limited
Prime Properties Pvt. Ltd.
S. M. Safeinvest Pvt. Ltd.
Name: Ms. Parul Mittal
Designation: Director-Design and
Marketing
Address: 66, Anand Lok, Khel Gaon
Road, New Delhi-110049
DIN: 00348783
11 November 2014 Greenply Leasing & Finance Pvt.
Ltd.
Prime Properties Pvt. Ltd.
S. M. Safeinvest Pvt. Ltd.
Name: Mr. Vijay Kumar Chopra
Designation: Independent Director
Address: 4-A, Harmony Tower, Dr.
E Moses Road, Worli, Mumbai-
400018
DIN: 02103940
30 October 2014 Bandhan Financial Services
Private Ltd.
Dewan Housing Finance
Corporation Ltd.
Future Retail Ltd.
Havells India Ltd.
India Infoline Finance Ltd.
Milestone Capital Advisors Ltd.
Pegasus Assets Reconstruction
Private Ltd.
PNB Metlife India Insurance
Company Ltd.
Reliance Capital Pension Fund
69
Name, Designation and Address
Date of
Appointment
Other Directorships
Ltd.
Religare Invesco Asset
Management Company Private
Ltd.
Rolta India Ltd.
Name: Ms. Urvashi Saxena
Designation: Independent Director
Address: 2602, Light Bridge,
Hiranandani Meadows, Gladys
Alwares Road, Thane (w)-400610.
DIN: 02021303
30 October 2014 Elder Health Care Ltd.
Gammon India Ltd.
Kosi Bridge Infrastructure
Company Ltd.
Sharda Cropchem Ltd.
Orbit Corporation Ltd.
Name: Ms. Sonali Bhagwati Dalal
Designation: Independent Director
Address: S-296, Greater Kailash-II,
New Delhi-110048
DIN: 01105028
30 October 2014 Fade to Black Design and Media
Pvt. Ltd.
Greenply Industries Ltd.
Spazzio Projects and Interiors Pvt.
Ltd.
There is no arrangement or understanding with major shareholders, customers, suppliers or others,
pursuant to which of the directors was selected as a director or member of senior management.
Brief biography of our Directors
1. Mr. Shiv Prakash Mittal, holds a bachelor‘s degree in science from the University of
Calcutta. He is one of the founders of Greenply Industries Limited. He was also associated
with Kitply Industries Limited for 21 (twenty one) years. He has over thirty years of
experience in the fields of production and marketing in plywood, laminates and allied
products.
2. Mr. Saurabh Mittal is an alumni of Mayo College Ajmer and a Commerce graduate from
the University of Madras. As JMD & CEO, he was the prime mover of the exponential
growth of Greenply Industries Limited and for carving a niche for Greenlam Laminates and
allied decorative products. His hands on engagement across the entire value chain to build the
business from its infancy has garnered him nearly two decades of first-hand experience in
various fields. He has been deeply involved with the manufacturing process and has
progressively added production capacity that is best in the industry. He spearheaded the
marketing initiatives personally building brand Greenlam that undisputedly commands the
market. His sales experience is especially strong in the B2B segment as he built a distribution
network that has provided incomparable market reach. His finance, investor relations and
corporate affairs involvement resulted in Greenply becoming the industry pioneer to obtain
PE funding and his export orientation has resulted in our Company consistently being the
largest exported laminate from India. The charismatic leadership, personal drive and strategic
thinking of Mr Saurabh Mittal has rallied our Company to attain market leadership in a very
short period of time, both in the domestic and international markets.
3. Ms. Parul Mittal is a commerce graduate and possesses expert knowledge in the area of
brand management. She was associated with Greenply Industries Limited for more than 5
years and engaged in various important functions of Greenply viz. to promote brand building
at national and international level, to develop and execute marketing strategy, to build and
maintain relationship with research organizations, advertising agencies and product
70
promotional houses. Her experience and guidance in the area of brand management is
expected to continue to enhance our Company‘s image in the market significantly.
4. Mr. Vijay Kumar Chopra is a commerce graduate from Sri Ram College of Commerce,
Delhi University and a fellow member of the Institute of Chartered Accountants of India. He
has over 35 years of banking experience at senior level positions at Corporation Bank, SIDBI,
Oriental Bank of Commerce and Central Bank of India. His last appointment has been as
whole time member of the SEBI.
5. Ms. Urvashi Saxena is a Post Graduate from Allahabad University and earned her Law
Degree from University of Lucknow. She has over 40 years of experience with the Income
Tax Department. Her last public service appointment was as Chairperson of the Income Tax
Settlement Commission after which she has taken up partnership in a Mumbai based Law
firm.
6. Ms. Sonali Bhagwati Dalal graduated with top honours in Architecture from CEPT
Ahmedabad, earning the prestigious L‘Institute Francaise D‘Architecture scholarship to work
in Paris for a year. She has nearly 30 years of architectural and interior design experience
wherein she earned numerous awards and accolades and is acknowledged as part of the top
twenty architects of India. She is president of Designplus, an internationally recognised
contemporary design firm.
Relationship of the Directors
Name of the Directors
Category of Directorship
Relationship between
Directors
Mr. Shiv Prakash Mittal
Non - Executive Chairman Mr. Saurabh Mittal (Son) and
Ms. Parul Mittal (Daughter-
in-law)
Mr. Saurabh Mittal Managing Director & CEO-
Promoter Director
Mr. Shiv Prakash Mittal
(Father) and
Ms. Parul Mittal (Wife)
Ms. Parul Mittal Director-Design & Marketing Mr. Shiv Prakash Mittal
(Father-in-law) and
Mr. Saurabh Mittal
(Husband)
Mr. Vijay Kumar Chopra Non-Executive - Independent
Director
None
Ms. Urvashi Saxena Non-Executive - Independent
Director
None
Ms. Sonali Bhagwati Dalal Non-Executive - Independent
Director
None
Borrowing Powers of the Board
Pursuant to the approval of the shareholders of the Company at the Extraordinary General Meeting
held on 11 December 2013 the Board of Directors of our Company is authorised to borrow any sum
of money to the extent of Rs. 1,000 Crores.
Compensation to our Whole-Time Directors
71
Mr. Saurabh Mittal, Managing Director and CEO
Mr. Saurabh Mittal is appointed as Managing Director & CEO of the Company for a period of 5 years
with effect from 11 November 2014 as recommended by the Nomination and Remuneration
Committee of the Board on the terms and conditions including remuneration as mentioned below.
Salary & Perquisites:
S. No.
Particulars
1. Basic Salary: Rs. 11,00,000/- per month w.e.f. November 11, 2014.
2. Commission: Not exceeding 2(two) percent of net profit in an accounting year of the
Company subject to availability of profit.
3. House Rent Allowance of Rs. 3,00,000/- per month w.e.f. November 11, 2014.
4. Reimbursement of medical expenses incurred in India or abroad including
hospitalisation, nursing home and surgical charges for himself and family subject to
ceiling of one month salary in a year.
5. Reimbursements of actual travelling expenses for proceeding on leave with family to
anywhere in India or abroad as per rules of the Company.
6. Reimbursement of membership fees for a maximum of two clubs.
7. Personal accidents and Mediclaim Insurance Policy, premium not to exceed Rs.
1,00,000/- per annum.
8. Car, Telephone, Cell Phone, PC shall be provided and their maintenance and running
expenses shall be met by the Company. The use of above at residence for official purpose
shall not be treated as perquisites.
9. Other benefits like Gratuity, Provident Fund, Leave etc. as applicable to the employees of
the Company.
Other Terms and Conditions:
1. The terms and conditions of appointment of Managing Director may be altered and varied
from time to time by the Board in such manner as may be mutually agreed, subject to such
approvals as may be required and within applicable limits of Companies Act.
2. No sitting fees will be paid to the Managing Director for attending meeting of the Board of
Directors or any committee thereof.
3. His office shall be liable to determination by retirement of directors by rotation.
4. The appointment may be terminated by either party by giving three months‘ notice of such
termination or salary in lieu thereof or by mutual consent.
Ms. Parul Mittal, Director-Design and Marketing
Ms. Parul Mittal is appointed as an Executive Director and designated as ‗Director-Design &
Marketing‘ of the Company for a period of 5 years with effect from 11 November 2014 as
recommended by the Nomination and Remuneration Committee of the Board on the terms and
conditions including remuneration as mentioned below.
72
Salary & Perquisites:
S. No.
Particulars
1. Basic Salary: Rs. 7,50,000/- per month w.e.f. 11 November 2014.
2. Commission: Not exceeding 1(one) percent of net profit in an accounting year of the
Company subject to availability of profit.
3. Reimbursement of medical expenses incurred in India or abroad including
hospitalisation, nursing home and surgical charges for herself and family subject to
ceiling of one month salary in a year.
4. Reimbursements of actual travelling expenses for proceeding on leave with family to
anywhere in India or abroad as per rules of the Company.
5. Reimbursement of membership fees for a maximum of two clubs.
6. Personal accidents and Mediclaim Insurance Policy, premium not to exceed Rs.
1,00,000/- per annum.
7. Car, Telephone, Cell Phone, PC shall be provided and their maintenance and running
expenses shall be met by the Company. The use of above at residence for official purpose
shall not be treated as perquisites.
8. Other benefits like Gratuity, Provident Fund, Leave etc. as applicable to the employees of
the Company.
Other Terms and Conditions of the appointment of Ms. Parul Mittal
1. The terms and conditions of appointment of Executive Director may be altered and varied
from time to time by the Board in such manner as may be mutually agreed, subject to such
approvals as may be required and within applicable limits of Companies Act.
2. No sitting fees will be paid to the Executive Director for attending meeting of the Board of
Directors or any committee thereof.
3. The appointment may be terminated by either party by giving three months‘ notice of such
termination or salary in lieu thereof or by mutual consent. However, if Ms. Parul Mittal is not
appointed as a Director at the ensuing Annual General Meeting (AGM), she will cease to be
an Executive Director of the Company from the date of such AGM and in that case notice of
termination shall not be given from either side.
Date of Expiry of current term of Office of Directors
Mr. Saurabh Mittal has been appointed as Managing Director & CEO of the Company w.e.f.
11 November 2014 for a period of 5 years.
Ms. Parul Mittal has been appointed as Director-Design and Marketing of the Company w.e.f.
11 November 2014 for a period of 5 years.
Mr. Shiv Prakash Mittal shall be liable to retire by rotation.
There are no benefits available to Directors upon termination of employment.
73
Changes in the Board of Directors since incorporation of our Company
S. No.
Name of Director
Appointment/Resignation
Date
1. Mr. Vijay Kumar Chopra Appointment 30 October 2014
2. Ms. Urvashi Saxena Appointment 30 October 2014
3. Ms. Sonali Bhagwati Dalal Appointment 30 October 2014
4. Mr. Rajesh Mittal Resignation 11 November 2014
5. Mr. Shobhan Mittal Resignation 11 November 2014
6. Ms. Parul Mittal Appointment 11 November 2014
Shareholding of Directors
S. No.
Name of Director
Number of Shares
Percentage of
Shareholding (%)
1. Mr. Shiv Prakash Mittal 5,06,000 2.10
2. Mr. Saurabh Mittal 1,59,000 0.66
3. Ms. Parul Mittal 400 0.00
4. Mr. Vijay Kumar Chopra Nil Nil
5. Ms. Urvashi Saxena Nil Nil
6. Ms. Sonali Bhagwati Dalal Nil Nil
Interest of Directors
1. All the Directors may be deemed to be interested only to the extent of fees, if any, payable to
them for attending meetings of the Board or committees thereof as well as to the extent of
reimbursement of expenses payable to them under the Articles.
2. Further, the Directors are interested to the extent of equity shares that they are holding and are
allotted to them pursuant to the Scheme, and also to the extent of any dividend payable to
them and other distributions in respect of the equity shares.
3. Except as stated otherwise in this Information Memorandum, our Company has not entered
into any contract, agreement or arrangement during the preceding two years from the date of
the Information Memorandum in which the Directors are directly or indirectly interested.
Key Managerial Personnel
As per the Composite Scheme of Arrangement, all the employees of Greenply engaged in the
Demerged Undertaking on and from the Effective Date, shall from such date become the employees
of Greenlam without any interruption of service as a result of the transfer of the Demerged
Undertaking to Greenlam.
Accordingly the Key Managerial Personnel being transferred from Greenply are as follows:
(1) Mr. Ashok Kumar Sharma.
(2) Mr. Prakash Kumar Biswal.
The details of Key Managerial Personnel of Greenlam are as follows:
S.No.
Name
Residential Address
Designation
1. Mr. Saurabh Mittal 66, Anadalok, Khel Gaon Road,
New Delhi-110 049
Managing Director and
CEO
74
2. Ms. Parul Mittal 66, Anand Lok, Khel Gaon Road,
New Delhi-110049
Director - Design and
Marketing
3. Mr. Ashok Kumar Sharma J-091, Windsor Park, Vaibhav
Khand-V, Indirapuram, Ghaziabad
- 201010, U.P.
Chief Financial Officer
4. Mr. Prakash Kumar Biswal Flat No. 1A, 53, H. L. Sarkar
Road, Regent Park, Kolkata –
700070
Company Secretary &
Asst. Vice President –
Legal
Status of Corporate Governance
The provisions of the listing agreement to be entered into with the Stock Exchanges with respect to
Corporate Governance will be applicable to the Company immediately upon the listing of its Equity
Shares on BSE and NSE. However, the Company is compliant with the provisions of Clause 49 of the
Listing Agreement and the details are as follows.
Board of Directors:
The Board of Directors of the Company comprises of 6 (six) Directors, of which 3 (three) are
Independent Directors, 1 (one) Non-Executive Director and 2 (two) Executive Directors.
S. No.
Name of Director
Category
1. Mr. Shiv Prakash Mittal Non - Executive Chairman
2. Mr. Saurabh Mittal Managing Director & CEO
3. Ms. Parul Mittal Director-Design & Marketing
4. Mr. Vijay Kumar Chopra Non-Executive - Independent Director
5. Ms. Urvashi Saxena Non-Executive - Independent Director
6. Ms. Sonali Bhagwati Dalal Non-Executive - Independent Director
Committees of the Board
(A) Audit Committee
The Audit Committee was constituted by a meeting of the Board of Directors held on 11
November 2014. The Audit Committee consists of 4 (four) directors of the Company:
S.
No.
Name of Director
Category
1. Ms. Urvashi Saxena Chairman -
Independent Director
2. Mr. Saurabh Mittal Member - Managing
Director & CEO
3. Mr. Vijay Kumar Chopra Member -
Independent Director
4. Ms. Sonali Bhagwati Dalal Member -
Independent Director
The constitution and terms of reference of the Audit Committee conforms to the requirements
of Clause 49 of the listing agreement and Section 177 of the Companies Act, 2013.
Terms of Reference for the Audit Committee are as follows:
75
Powers of Audit Committee
The Audit Committee shall have powers, which should include the following:
(i) To investigate any activity within its terms of reference.
(ii) To seek information from any employee.
(iii) To obtain outside legal or other professional advice.
(iv) To secure attendance of outsiders with relevant expertise, if it considers necessary.
Role of Audit Committee
The role of the Audit Committee shall include the following:
(i) Oversight of the company‘s financial reporting process and the disclosure of its
financial information to ensure that the financial statement is correct, sufficient and
credible;
(ii) Recommendation for appointment, remuneration and terms of appointment of
auditors of the company;
(iii) Approval of payment to statutory auditors for any other services rendered by the
statutory auditors except those which are specifically prohibited;
(iv) Reviewing, with the management, and examination of the financial statements and
auditor's report thereon before submission to the board for approval, with particular
reference to:
(a) Matters required to be included in the Director‘s Responsibility Statement to
be included in the Board‘s report in terms of clause (c) of sub-section 3 of
section 134 of the Companies Act, 2013
(b) Changes, if any, in accounting policies and practices and reasons for the same
(c) Major accounting entries involving estimates based on the exercise of
judgment by management
(d) Significant adjustments made in the financial statements arising out of audit
findings
(e) Compliance with listing and other legal requirements relating to financial
statements
(f) Disclosure of any related party transactions
(g) Qualifications in the draft audit report
(v) Reviewing, with the management, the quarterly financial statements before
submission to the board for approval;
(vi) Reviewing, with the management, the statement of uses / application of funds raised
through an issue (public issue, rights issue, preferential issue, etc.), the statement of
76
funds utilized for purposes other than those stated in the offer document / prospectus /
notice and the report submitted by the monitoring agency monitoring the utilisation of
proceeds of a public or rights issue, and making appropriate recommendations to the
Board to take up steps in this matter;
(vii) Review and monitor the auditor‘s independence and performance, and effectiveness
of audit process;
(viii) Approval or any subsequent modification of transactions of the company with related
parties;
(ix) Scrutiny of inter-corporate loans and investments;
(x) Valuation of undertakings or assets of the company, wherever it is necessary;
(xi) Evaluation of internal financial controls and risk management systems;
(xii) Reviewing, with the management, performance of statutory and internal auditors,
adequacy of the internal control systems;
(xiii) Reviewing the adequacy of internal audit function, if any, including the structure of
the internal audit department, staffing and seniority of the official heading the
department, reporting structure coverage and frequency of internal audit;
(xiv) Discussion with internal auditors of any significant findings and follow up there on;
(xv) Reviewing the findings of any internal investigations by the internal auditors into
matters where there is suspected fraud or irregularity or a failure of internal control
systems of a material nature and reporting the matter to the board;
(xvi) Discussion with statutory auditors before the audit commences, about the nature and
scope of audit as well as post-audit discussion to ascertain any area of concern;
(xvii) To look into the reasons for substantial defaults in the payment to the depositors,
debenture holders, shareholders (in case of non-payment of declared dividends) and
creditors;
(xviii) To review the functioning of the Whistle Blower mechanism;
(xix) Approval of appointment of CFO (i.e., the whole-time Finance Director or any other
person heading the finance function or discharging that function) after assessing the
qualifications, experience and background, etc. of the candidate;
(xx) Carrying out any other function as may be referred to by the Board or mandated by
regulatory provisions from time to time.
Review of information by Audit Committee
The Audit Committee shall mandatorily review the following information:
(i) Management discussion and analysis of financial condition and results of operations;
(ii) Statement of significant related party transactions (as defined by the Audit
Committee), submitted by management;
77
(iii) Management letters / letters of internal control weaknesses issued by the statutory
auditors;
(iv) Internal audit reports relating to internal control weaknesses; and
(v) The appointment, removal and terms of remuneration of the Chief internal auditor
shall be subject to review by the Audit Committee.
(B) Nomination & Remuneration Committee
The Nomination & Remuneration Committee was constituted by a meeting of the Board of
Directors held on 11 November 2014. The Nomination & Remuneration Committee consists
of 3 (three) directors of the Company:
The Nomination & Remuneration Committee consists of the following directors:
S.
No.
Name of Director
Category
1. Mr. Vijay Kumar Chopra Chairman – Independent Director
2. Mr. Shiv Prakash Mittal Member – Non-Executive
Chairman
3. Ms. Urvashi Saxena Member - Independent Director
Terms of Reference for the Nomination and Remuneration Committee
The Nomination and Remuneration Committee shall be responsible for, among other things,
as may be required by the Company from time to time, the following:
(i) To formulate criteria for:
(a) determining qualifications, positive attributes and independence of a director;
(b) evaluation of independent directors and the Board
(ii) To devise the following policies on:
(a) remuneration including any compensation related payments of the directors,
key managerial personnel and other employees and recommend the same to
the board of the Company;
(b) board diversity laying out an optimum mix of executive, independent and
non-independent directors keeping in mind the needs of the Company.
(iii) To identify persons who are qualified to:
(a) become directors in accordance with the criteria laid down, and recommend
to the Board the appointment and removal of directors;
(b) be appointed in senior management in accordance with the policies of the
Company and recommend their appointment to the HR Department and to the
Board.
(iv) To carry out evaluation of the performance of every director of the Company;
78
(v) To express opinion to the Board that a director possesses the requisite qualification(s)
for the practice of the profession in case the services to be rendered by a director are
of professional nature.
(vi) To carry out such other business as may be required by applicable law or delegated
by the Board or considered appropriate in view of the general terms of reference and
the purpose of the Nomination and Remuneration Committee.
(C) Stakeholders’ Relationship Committee
The Stakeholders‘ Relationship Committee was constituted by a meeting of the Board of
Directors held on 11 November 2014. The Stakeholders‘ Relationship Committee consists of
3 (three) directors of the Company:
The Stakeholders‘ Committee comprises of the following directors:
S. No.
Name of the Director
Category
1. Mr. Shiv Prakash Mittal Chairman – Non-Executive Chairman
2. Mr. Vijay Kumar Chopra Member – Independent Director
3. Mr. Saurabh Mittal Member – Managing Director & CEO
Terms of Reference for the Stakeholders’ Relationship Committee are as below:
The Stakeholders Relationship Committee shall be responsible for the following:
(i) To ensure proper and timely attendance and redressal of grievances of security
holders of the Company in relation to:
(a) Transfer of shares;
(b) Non-receipt of annual reports;
(c) Non-receipt of declared dividend;
(d) All such complaints directly concerning the shareholders / investors as
stakeholders of the Company; and
(e) Any such matters that may be considered necessary in relation to
shareholders and investors of the Company.
(ii) Formulation of procedures in line with the statutory guidelines to ensure speedy
disposal of various requests received from shareholders from time to time;
(iii) To review and / or approve applications for transfer, transmission, transposition and
mutation of share certificates including issue of duplicate certificates and new
certificates on split / sub-division / consolidation / renewal and to deal with all related
matters.
(iv) To review and approve requests of dematerialization and re-materialisation of
securities of the Company and such other related matters;
79
(v) Appointment and fixing of remuneration of RTA and overseeing their performance;
(vi) Review the status of the litigation(s) filed by/against the security holders of the
Company;
(vii) Review the status of claims received for unclaimed shares;
(viii) Recommending measures for overall improvement in the quality of investor services;
(ix) Monitoring implementation and compliance with the Company's Code of Conduct for
Prohibition of Insider Trading in pursuance of SEBI (Prohibition of Insider Trading)
Regulations, 1992;
(x) Review the impact of enactments/ amendments issued by the MCA/ SEBI and other
regulatory authorities on matters concerning the investors in general;
(xi) Such other matters as per the directions of the Board of Directors of the Company
and/ or as required under Clause 49 of the Listing Agreements relating to Corporate
Governance, as amended, from time to time.
(D) Corporate Social Responsibility (CSR) Committee
The Corporate Social Responsibility Committee was constituted by a meeting of the Board of
Directors held on 11 November 2014. The Corporate Social Responsibility Committee
consists of 4 (four) directors of the Company:
The CSR‘s Committee comprises of the following directors:
S.
No.
Name of the Director
Category
1. Mr. Shiv Prakash Mittal Member - Non-Executive Chairman
2. Mr. Saurabh Mittal Member - Managing Director & CEO
3. Ms. Parul Mittal Member - Director-Design & Marketing
4. Ms. Sonali Bhagwati Dalal Member – Independent Director
Terms of Reference of the CSR Committee are as provided hereunder:
(i) To formulate, monitor and recommend to the Board the CSR Policy including the
activities to be undertaken by the Company;
(ii) To recommend the amount of expenditure to be incurred on the activities undertaken;
(iii) To monitor the implementation of the framework of Corporate Social Responsibility
Policy;
(iv) To evaluate the social impact of the Company‘s CSR Activities;
(v) To review the Company‘s disclosure of CSR matters;
(vi) To submit a report on CSR matters to the Board at such intervals and in such format
as may be prescribed.
80
(vii) To consider other functions, as defined by the Board or as may be stipulated under
any law, rule or regulation including the listing agreement, Corporate Social
Responsibility Voluntary Guidelines 2009 and the Companies Act, 2013.‖
(E) Operational & Finance Committee
The Operational & Finance Committee was constituted by a meeting of the Board of
Directors held on 11 November 2014. The Operational & Finance Committee consists of 3
(three) directors of the Company:
S. No.
Name of the Director
Category
1. Mr. Shiv Prakash Mittal Member - Non - Executive Chairman
2. Mr. Saurabh Mittal Member - Managing Director & CEO
3. Ms. Parul Mittal Member - Director-Design & Marketing
Terms of Reference of the Operational & Finance Committee are as follows:
(i) To avail loan up to the maximum limit of Rs. 50 Crores in a single transaction from
any Bank/financial institutions/lenders and to hypothecate/mortgage the assets
including immovable properties of the Company accordingly subject to its overall
borrowing limit up to Rs.500 crores.
(ii) To accept/approve the renewal of loan/credit facilities including interchangeability of
loan/credit facilities sanctioned by the Bank/financial institutions/lenders and to
hypothecate/mortgage the assets including immovable properties of the company
accordingly from time to time subject to its overall borrowing limit up to Rs.500
crores.
(iii) To approve all extension of charges in respect of immovable and movable properties
of the Company in favour of bankers/financial institutions/lenders for the credit
facilities sanctioned to the Company from time to time.
(iv) To issue and allot Commercial Papers carrying maturity period of 15 days or more in
compliance with the guidelines prescribed by the Reserve Bank of India (RBI) and
Fixed Income Money Market and Derivatives Association of India (FIMMDA), with
or without earmarking of Cash Credit limit or other working capital limit as may be
imposed by the rating agency and to appoint Issuing and Paying Agent (IPA) and sign
any agreement, deeds, declarations, undertakings etc. as may be required in this
regard subject that the overall outstanding commercial papers shall not exceed Rs.100
crores.
(v) To enter into derivative(s)/forward contracts for hedging business transactions with
various banks/financial institutions/lenders from time to time as may be required in
the ordinary course of business.
(vi) To make loan and/or give Corporate Guarantee/letter of comfort up to Rs. 25 Crore in
a single transaction up to overall maximum amount of Rs. 250 crores to such persons
on such terms as may deem necessary to the Company.
(vii) To Invest surplus funds of or funds not immediately required by the Company from
time to time in any mutual fund scheme, debt instrument(s) of any government or
81
equity shares issued by a listed company or any other company up to an amount of
Rs. 50 crore.
(viii) To avail vehicles loan from any Bank/Institutions/Lenders for the business of the
Company.
(ix) To take vehicles on Lease basis from time to time for the business of the Company.
(x) To open and close the Banking and dividend accounts of the Company.
(xi) To change signatories and/or nomenclature of the Banking and dividend accounts
whenever required.
(xii) To authorize/empower any person to file suit on behalf of the Company or defend any
suit filed against the Company.
(xiii) To authorize/empower any person to apply for any license/certificate as may be
required from time to time or any amendment, renewal or surrender thereof.
(xiv) To give power/authorization/duties whenever required to a person on behalf of the
Company in relation to business operations of the Company.
(xv) To give power/authorization/duties whenever required to a person on behalf of the
Company to execute and sign rent agreement/lease agreement/leave and licence
agreement etc. in relation to business operations of the Company.
(xvi) To authorize any director or employee of the Company or any other person to attend
and vote, on behalf of the Company, at any meeting of shareholders or creditors
including power to appoint proxy as well as to vote electronically or through postal
ballot or any other mode allowed in this regard.
(xvii) To affix or authorise fixation of the Common seal of the Company to any documents/
papers to be executed by the Company.
(xviii) To do all such acts, things or deeds as may be necessary or incidental to exercise of
the above powers including delegation of any of its powers to any director or
employee of the Company.
(xix) To exercise any other power and authority as may be further delegated to it over and
above the aforesaid powers and authorities.
For computing the single transaction limit of Rs. 50 crore or overall borrowing limit
of Rs. 500 crore, the renewed credit facilities shall not be considered where the
original or any subsequent sanction thereof was approved by the Board of Directors of
the Company. However, in case of renewal-cum-enhancement of credit facilities, the
enhanced component of the credit facilities shall be considered for the above limits.‖
(F) Demerger Committee
The Demerger Committee was constituted by a meeting of the Board of Directors held on 29
November 2014. The Demerger Committee consists of 3 (three) directors of the Company:
S. No.
Name of the Director
Category
82
1. Mr. Shiv Prakash Mittal Chairman - Non-Executive Chairman
2. Mr. Saurabh Mittal Member - Managing Director & CEO
3. Ms. Parul Mittal Member - Director-Design & Marketing
Terms of Reference of the Demerger Committee are as follows:
(i) To approve the Information Memorandum in respect of listing of equity shares of the
Company with National Stock Exchange of India Limited (NSE) and BSE Limited
(BSE).
(ii) to settle any question, difficulty or doubt that may arise in connection with giving
effect to the composite Scheme of Arrangement, filing of Information Memorandum
and other documents, agreements, declarations, application, certificates etc. in
connection with listing of the equity shares of the Company with NSE and BSE and
to do all such acts, deeds and things as the Demerger Committee may in its absolute
discretion consider necessary, proper, desirable or appropriate for settling such
question, difficulty or doubt.
83
XVII. PROMOTER AND GROUP COMPANIES
Details of Promoter
Mr. Saurabh Mittal is the promoter of our Company.
Mr. Saurabh Mittal,
Managing Director& CEO
Voters identity number – UJE0944181
Driving license number – DL-0320090084196 (P)
For further details of our Promoter, please refer to the section titled ―Our Management‖ and
for details of any outstanding litigation by and against him, please refer to the sections titled
―Outstanding Litigations, Defaults and Material Developments‖
Following are the companies which are promoted by our Promoter which we have termed as
‗Group Companies‘ for the purpose of this Information Memorandum.
Details of Group Companies
Companies forming part of the Group
Unless otherwise stated none of the companies forming part of the Group Companies is a sick
company under the meaning of SICA and none of them are under winding up or had remained
defunct and for which application was made to the Registrar of Companies for striking off the
name of the company, during the five years preceding the date of this Information
Memorandum.
1. Name of Group Company: Himalaya Granites Limited
Date of incorporation: 11 December 1987
Principal business: Export oriented granite processing unit (presently not in operation)
Capital Structure of the Himalaya Granites Limited:
Particulars Amount in Rs.
Authorised Capital
40,00,000 Equity Shares of Rs. 10 each 4,00,00,000
Total 4,00,00,000
Issued, Subscribed and Paid-Up
30,05,000 Equity Shares of Rs. 10 each 3,00,50,000
Total 3,00,50,000
84
Shareholding Pattern of the Himalaya Granites Limited as on 30 September 2014:
Category of
Shareholder
No. of
Sharehol
ders
Total No.
of Shares
Total No. of
Shares held in
Dematerialize
d Form
Total
Shareholding as a
% of Total No. of
Shares
As a
% of
(A+B)
As a %
of
(A+B+C)
(A) Shareholding of
Promoter and
Promoter Group
(1) Indian
Individuals/Hindu
Undivided Family 10 11,22,250 11,22,250 37.35 37.35
Bodies Corporate 3 5,94,800 5,94,800 19.79 19.79
Sub Total 13 17,17,050 17,17,050 57.14 57.14
(2) Foreign
Total Shareholding of
Promoter and
Promoter Group (A)
13 17,17,050 17,17,050 57.14 57.14
(B) Public
Shareholding
(1) Institutions
Financial Institutions /
Banks 1 100 0 0.00 0.00
Sub Total 1 100 0 0.00 0.00
(2) Non-Institutions
Bodies Corporate 35 2,44,254 2,40,354 8.13 8.13
Individuals
Individual shareholders
holding nominal share
capital up to Rs. 1 lakh
1,200 2,55,880 1,73,444 8.52 8.52
Individual shareholders
holding nominal share
capital in excess of Rs. 1
lakh
8 7,86,915 7,86,915 26.19 26.19
Any Others (Specify) 3 801 801 0.03 0.03
Non Residential Indian 3 801 801 0.03 0.03
Sub Total 1,246 12,87,850 12,01,514 42.86 42.86
Total Public
Shareholding (B) 1,247 12,87,950 12,01,514 42.86 42.86
Total (A)+(B) 1,260 30,05,000 29,18,564 100.00 100.00
(C) Shares held by
Custodians and against
which Depository
Receipts have been
0 0 0 0.00 0.00
85
Category of
Shareholder
No. of
Sharehol
ders
Total No.
of Shares
Total No. of
Shares held in
Dematerialize
d Form
Total
Shareholding as a
% of Total No. of
Shares
issued
(1) Promoter and
Promoter Group 0 0 0 0.00 0.00
(2) Public 0 0 0 0.00 0.00
Sub Total 0 0 0 0.00 0.00
Total (A)+(B)+(C) 1,260 30,05,000 29,18,564 0.00 100.00
List of persons/entities comprising as Promoter/PG of the Company
S. No.
Name of Promoter
Number of Equity
Shares
Percentage of
paid up capital
1 Shiv Prakash Mittal 12,500 0.42
2 Shiv Prakash Mittal on behalf of Shiv
Prakash Mittal HUF
1,09,250 3.64
3 Rajesh Mittal 6,21,250 20.67
4 Karuna Mittal 1,250 0.04
5 Saurabh Mittal 10,000 0.33
6 Parul Mittal 600 0.02
7 Shobhan Mittal 27,500 0.92
8 Surbhi Mittal 27,500 0.92
9 Saurabh Mittal On Behalf of Trade
Combines, Partnership Firm
1,83,700 6.11
10 Shobhan Mittal On Behalf Of Trade
Combines, Partnership Firm
1,28,700 4.28
11 Greenply Industries Ltd 3,80,583 12.66
12 S. M. Management Pvt Ltd 2,14,117 7.13
13 Greenply Leasing & Finance Pvt. Ltd 100 0.00
TOTAL 17,17,050 57.14
Shareholding of securities (including shares, warrants, convertible securities) of persons
belonging to the category Public and holding more than 1% of the total number of
shares
S. No.
Name of Shareholder
Number of Equity
Shares
Percentage of paid
up capital
1. Anirudha Bubna Trust 3,98,091 13.25
2. Suryalata Trexim Pvt Ltd 1,19,465 3.98
3. Manju Bhalotia Manju 1,27,328 4.24
4. Sanjeev Krishna Bhalotia 72,353 2.41
5. Sangeetha S 52,000 1.73
6. Sarvesh Bubna Trust 50,202 1.67
86
S. No.
Name of Shareholder
Number of Equity
Shares
Percentage of paid
up capital
7. JVL Agro Industries Ltd. 51,592 1.72
8. Seetha Kumari 37,849 1.26
9. S Sathya 33,990 1.13
TOTAL 9,42,870 31.38
Shareholding of securities (including shares, warrants, convertible securities) of persons
belonging to the category Public and holding more than 5% of the total number of
shares
S. No.
Name of Shareholder
Number of Equity
Shares
Percentage of paid
up capital
1. Anirudha Bubna Trust 3,98,091 13.25
TOTAL 3,98,091 13.25
Interest of the Promoter:
Mr. Saurabh Mittal holds 10,000 equity shares representing to 0.33 % of the total issued and
paid up share capital of the company.
Board of Directors
Mr. Saurabh Mittal, Non-Executive Chairman
Mr. Ramesh Kumar Haritwal, Managing Director & CEO
Mr. Beni Gopal Saraf
Mr. Mahesh Kumar Malpani
Mr. Pradip Manharlal Domadia
Financial Performance of Himalaya Granites Limited:
Rs.
For the year
ending 31.03.2012
For the year
ending
31.03.2013
For the year
ending
31.03.2014 Particulars
Number of Shares 30,05,000 30,05,000 30,05,000
Equity capital 3,00,50,000 3,00,50,000 3,00,50,000
Reserves & Surplus (excluding
revaluation reserves)
6,45,91,367 6,80,33,334 6,81,06,867
Net worth 9,46,41,367 9,80,83,334 9,81,56,867
Turnover/ sales 3,15,429 2,51,550 1,47,400
Other Income 56,92,134 1,19,15,436 77,80,355
Profit after tax (19,21,968) 34,41,967 73,533
EPS (Rs.) (0.64) 1.15 0.02
Book Value per share (Rs.) 31.49 32.64 32.66
Share price data for last six months
87
Month BSE
High(Rs.) Low(Rs.)
March, 2014 34.50 34.50
April, 2014 37.00 36.20
May, 2014 35.15 35.15
June, 2014 33.60 28.90
July, 2014 30.45 28.80
August, 2014 30.50 30.20
September, 2014 30.20 21.30
October, 2014 21.25 16.35
High and low prices are based on intraday trading prices. Source: www.bseindia.com
Particulars of high, low and average prices of the shares during the preceding three
years
BSE
Fiscal Year High (Rs.) Date of
High Low (Rs.) Date of Low
Average
Price(Rs.)
2011-12 20.70 20/02/2012 12.51 20/09/2011 16.61
2012-13 40.50 25/06/2012 18.00 25/04/2012 29.25
2013-14 36.75 11/11/2013 34.50 14/02/2014 35.63
High and low prices are based on intraday trading prices. Source: www.bseindia.com.
Average price is calculated as the average of the High and low prices for the respective year
as mentioned above.
2. Name of Group Company: Greenply Leasing & Finance Private Limited
Date of incorporation: 1 November 1994
Principal business: Non-deposit taking non-banking finance company carrying on the
business of investment in securities.
Capital Structure of the Company:
Particulars Amount in Rs.
Authorised Capital
50,00,000 Equity Shares of Rs. 10 each 5,00,00,000
Total 5,00,00,000
Issued, Subscribed and Paid-Up
38,19,000 Equity Shares of Rs. 10 each 3,81,90,000
Total 3,81,90,000
Shareholding Pattern of the Company:
Category
Number of shares
Percentage of total share
capital
Promoter & Promoter
Group
38,19,000 100
Non-Promoter Nil N. A.
88
Total 38,19,000 100
Interest of the Promoter:
Mr. Saurabh Mittal holds 811,600 equity shares representing to 21.25 % of the total issued
and paid up share capital of the company.
Financial Performance: Rs.
Particulars For the year
ending
31.03.2012
For the year
ending
31.03.2013
For the year
ending
31.03.2014
Number of Shares 36,19,000 36,19,000 38,19,000
Equity capital 3,61,90,000 3,61,90,000 3,81,90,000
Reserves & Surplus
(excluding revaluation
reserves)
20,91,58,208 22,16,68,520 24,40,63,392
Net worth 24,53,48,208 25,78,58,520 28,20,78,532
Turnover/ sales 0 6,54,181 78,805
Other Income 37,25,974 1,35,35,894 97,53,257
Profit after tax 33,82,980 1,25,10,312 93,94,872
EPS (Rs.) 0.94 3.46 2.60
Book Value per share (Rs.) 67.79 71.25 73.86
3. Name of Group Company: Prime Properties Private Limited
Date of incorporation: 30 July 1997
Principal business: Renting of immovable properties.
Capital Structure of the Company:
Particulars Amount in Rs.
Authorised Capital
25,00,000 Equity Shares of Rs. 10 each 2,50,00,000
Total 2,50,00,000
Issued, Subscribed and Paid-Up
19,20,000 Equity Shares of Rs. 10 each 1,92,00,000
Total 1,92,00,000
Shareholding Pattern of the Company:
Category
Number of shares
Percentage of total share
capital
Promoter & Promoter
Group 19,20,000 100
Non-Promoter Nil N. A.
Total 19,20,000 100
89
Interest of the Promoter:
Mr. Saurabh Mittal holds 254,000 equity shares representing to 13.23 % of the total issued
and paid up share capital of the company.
Financial Performance: Rs.
Particulars For the year
ending
31.03.2012
For the year
ending
31.03.2013
For the year
ending
31.03.2014
Number of Shares 19,20,000 19,20,000 19,20,000
Equity capital 1,92,00,000 1,92,00,000 1,92,00,000
Reserves & Surplus (excluding
revaluation reserves)
12,36,838 -23,78,713 29,55,654
Net worth 2,04,36,838 1,68,21,287 2,21,55,654
Turnover/ sales 0 0 0
Other Income 86,85,319 30,00,000 30,00,300
Profit after tax 15,98,851 (36,15,551) (23,58,571)
EPS (Rs.) 0.83 (1.88) (1.23)
Book Value per share (Rs.) 10.64 8.76 11.54
4. Name of Group Company: S. M. Safeinvest Private Limited
Date of incorporation: 10 July 2013
Principal business: Investment in securities.
Capital Structure of the Company:
Particulars Amount in Rs.
Authorised Capital
2,50,000 Equity Shares of Rs. 10 each 25,00,000
Total 25,00,000
Issued, Subscribed and Paid-Up
10,000 Equity Shares of Rs. 10 each 1,00,000
Total 1,00,000
Shareholding Pattern of the Company:
Category
Number of shares
Percentage of total share
capital
Promoter & Promoter
Group
10,000 100
Non-Promoter Nil N. A.
Total 10,000 100
Interest of the Promoter:
Mr. Saurabh Mittal holds 5,000 equity shares representing to 50.00 % of the total issued and
paid up share capital of the company.
Financial Performance: Rs.
90
Particulars
For the year
ending
31.03.2012
For the year
ending
31.03.2013
For the year
ending
31.03.2014
Number of Shares N.A. N.A. 10,000
Equity capital N.A. N.A. 1,00,000
Reserves & Surplus (excluding
revaluation reserves)
N.A. N.A. -19,508
Net worth N.A. N.A. 26,858
Turnover/ sales N.A. N.A. 0
Other Income N.A. N.A. 0
Profit after tax N.A. N.A. -19,508
EPS (Rs.) N.A. N.A. -1.95
Book Value per share (Rs.) N.A. N.A. 2.69
5. Name of Group Company: Greenlam VT Industries Private Limited
Date of incorporation: 23 August 2013
Principal business: To deal in Doors & High-End Doors.
Capital Structure of the Company:
Particulars Amount in Rs.
Authorised Capital
1,00,000 Equity Shares of Rs. 10 each 10,00,000
Total 10,00,000
Issued, Subscribed and Paid-Up
10,000 Equity Shares of Rs. 10 each 1,00,000
Total 1,00,000
Shareholding Pattern of the Company:
Category
Number of shares
Percentage of total share
capital
Promoter & Promoter
Group
10,000 100
Non-Promoter Nil N. A.
Total 10,000 100
Interest of the Promoter:
Mr. Saurabh Mittal holds 1* equity share representing to 0.01 % of the total issued and paid
up share capital of the company.
* Registered member in the Register of Members of Greenlam VT Industries Pvt. Ltd. and the share are
beneficially owned by Greenply Industries Limited.
Financial Performance: Rs.
91
Particulars
For the year
ending
31.03.2012
For the year
ending
31.03.2013
For the year
ending
31.03.2014
Number of Shares N.A. N.A. 10,000
Equity capital N.A. N.A. 1,00,000
Reserves & Surplus (excluding
revaluation reserves)
N.A. N.A. -27,184
Net worth N.A. N.A. 39,482
Turnover/ sales N.A. N.A. 0
Other Income N.A. N.A. 0
Profit after tax N.A. N.A. -27,184
EPS (Rs.) N.A. N.A. -0.27
Book Value per share (Rs.) N.A. N.A. 3.95
6. Name of Group Company: Jayjay Agencies Private Limited
Date of incorporation: 26 March 2010
Principal business: To deal in agricultural produces and investment in securities.
Capital Structure of the Company:
Particulars Amount in Rs.
Authorised Capital
2,00,000 Equity Shares of Rs. 100 each 2,00,00,000
Total 2,00,00,000
Issued, Subscribed and Paid-Up
1,95,000 Equity Shares of Rs. 100 each 1,95,00,000
Total 1,95,00,000
Shareholding Pattern of the Company:
Category
Number of shares
Percentage of total share
capital
Promoter & Promoter
Group
1,95,000 100
Non-Promoter Nil N. A.
Total 1,95,000 100
Interest of our Promoter
Mr. Saurabh Mittal holds 40,000 equity shares representing to 20.51 % of the total issued and
paid up share capital of the company.
Financial Performance: Rs.
Particulars
For the year
ending
31.03.2012
For the year
ending
31.03.2013
For the year
ending
31.03.2014
Number of Shares 1,95,000 1,95,000 1,95,000
Equity capital 1,95,00,000 1,95,00,000 1,95,00,000
92
Reserves & Surplus
(excluding revaluation
reserves)
-2,13,155 -2,84,132 -3,54,678
Net worth 1,91,95,225 1,91,70,058 1,91,45,322
Turnover/ sales 0 0 0
Other Income 0 0 0
Profit after tax -72,488 -70,977 -70,546
EPS (Rs.) -0.37 -0.36 -0.36
Book Value per share (Rs.) 98.44 98.31 98.18
Other entities forming part of the Promoter Group:
Saurabh Mittal (HUF)
Saurabh Mittal (HUF) was formed on 23 February 2006. The karta is Mr. Saurabh Mittal.
Members of HUF are as follows:
Ms. Parul Mittal;
Mr. Jai Mittal;
Ms. Jia Mittal.
Companies with which our Promoter have disassociated in the last three years
Mr. Saurabh Mittal has resigned from the board of Greenply Industries Limited with effect
from 11 November 2014.
Common Pursuits
There are no common pursuits amongst any of the Group Companies and our Company.
Related business transactions
For details refer to chapter titled ―Financial Statements‖
Details of Sales or purchase between group companies/subsidiaries/ associate companies
As on 30 September 2014, there are no sales or purchase between group
companies/subsidiaries/ associate companies when such sales or purchases exceed in value in
the aggregate 10% of the total sales or purchases of the Company.
93
XVIII. DIVIDEND AND DIVIDEND POLICY
Our Company has not declared or paid any cash dividend on our Equity Shares in the past. The
declaration and payment of dividends if any, will be recommended by our Board of Directors and
approved by our shareholders in their discretion, and will depend on a number of factors, including
but not limited to our earnings, capital requirements and overall financial position. Our Company has
no stated dividend policy. This is not indicative of our dividend policy or dividend amount, if any in
the future.
94
SECTION V – FINANCIAL STATEMENTS
XIX. FINANCIAL STATEMENT OF THE COMPANY
Limited Review Report for the quarter ended 31 December 2014
95
PART I (` in lacs)
Sl.Year ended
No. 31.12.2014 31.12.2014 31.03.2014
(Unaudited) (Unaudited) (Audited)
1
20411.40 58567.49 -
1064.84 2770.66 -
21476.24 61338.15 -
2
13524.58 36809.70 -
154.09 283.25 -
(670.13) 203.41 -
2080.57 5912.01 -
812.48 2224.95 -
105.50 147.92 -
4101.25 11123.98 0.80
20108.34 56705.22 0.80
3 1367.90 4632.93 (0.80)
4 26.39 112.22 -
5 1394.29 4745.15 (0.80)
6 703.57 1984.77 -
7 690.72 2760.38 (0.80)
8 - - -
9 690.72 2760.38 (0.80)
10
144.78 578.59 -
206.07 498.98 -
(135.61) (507.58) -
11 475.48 2190.39 (0.80)
12 - - -
13 Net Profit / (Loss) for the period 475.48 2190.39 (0.80)
14 1206.82 1206.82 5.00
15 - - -
16 16.36* 73.40* (0.80)
1.97* 9.08* (0.80)
Profit/(Loss) from ordinary activities after finance costs but before exceptional items
Net Profit/(Loss) from ordinary activities after tax
Tax Expenses
Exceptional items
Profit/ (Loss) from ordinary activities before tax
for MAT Credit
for Deferred
Nine-months
ended
Profit from operations before other income, finance costs and exceptional Items
Finance costs
P a r t i c u l a r s
Total Expenses
Other income
Profit /(Loss) from ordinary activities before finance costs and exceptional items
b) Purchase of Stock-in-trade
Income from Operations
(a) Net sales/income from operations (Net of excise duty)
(b) Other Operating Income
Total income from operations (net)
Quarter ended
i) Basic EPS (`) before and after extraordinary items (of ` 5/- each)
ii) Diluted EPS (`) before and after extraordinary items (of ` 5/- each)
d) Employee benefits expense
a) Cost of materials consumed
Expenses
c) Changes in inventories of finished goods, work-in-progress and stock-in-trade
g) Other Expenses
f) Loss/(Gain) due to fluctuation in Foreign Exchange Rates
e) Depreciation and amortisation expense
for Current
Paid-up equity share capital (Face value ` 5/- per share)
Reserves excluding Revaluation Reserves
Extraordinary items (net of tax expense ` Nil)
Corporate Office: 1501-1505, Narain Manzil, 23, Barakhamba Road, New Delhi - 110 001
GREENLAM INDUSTRIES LIMITED
Regd.Office : Makum Road, Tinsukia, Assam - 786 125
Corporate Identity Number : U21016AS2013PLC011624, Phone : +91 11 4279 1399, Fax : +91 11 4279 1330
Website : www.greenlam.com E-mail : [email protected]
Statement of Standalone Un-audited Results for the quarter and nine-months ended 31st December, 2014
96
A
1
10861374 10861374 Nil
45.00 45.00 Nil
2
Nil Nil Nil
Nil Nil Nil
Nil Nil Nil
13275000 13275000 100000
100.00 100.00 100.00
55.00 55.00 100.00
B INVESTOR COMPLAINTS
Nil
1
1
Nil
* Not annualised
1
2
3
4
PART II Select Information for the quarter and nine-months ended 31st December, 2014
PARTICULARS OF SHAREHOLDING
The Hon'ble Gauhati High Court has, on October 31, 2014, approved the composite Scheme of Arrangement
under Sections 100 to 104 and 391 to 394 of the Companies Act, 1956 between Greenply Industries Limited
("Greenply") and Greenlam Industries Limited ("Greenlam") and their respective shareholders and creditors, for
demerger of the Decorative Business (comprising of Laminates and Allied Products) of Greenply with all its
assets and liabilities, into Greenlam with effect from April 01, 2013 (Appointed Date). The Scheme became
effective w.e.f. November 17, 2014 i.e. the date of filing of the certified copy of the order of the Hon'ble Gauhati
High Court with the Registrar of Companies, Shillong. Pursuant to the said Scheme, the Company has, on
29.11.2014, issued and allotted 24136374 equity shares of ` 5/- each to the eligible shareholders of Greenply.
Further, the existing share capital of the Comapny (prior to the said allotment) of ` 5,00,000/- divided into
1,00,000 equity shares of ` 5/- each have been cancelled pursuant to the said scheme and consequently the
Company has ceased to be a subsidiary of Greenply Industries Limited.
a) Pledged/Encumbered
-Number of Shares
-Percentage of shares (as a % of the total shareholding of promoter and promoter group)
Public Shareholding
-Number of Shares
Remaining unresolved at the end of the quarter
Notes:
b) Non-encumbered
-Number of Shares
-Percentage of shares (as a % of the total shareholding of promoter and promoter group)
-Percentage of shares (as a % of the total share capital of the company)
Disposed of during the quarter
The above results have been reviewed by the Audit Committee and approved by the Board of Directors of the
Company at their respective meetings held on 2nd February, 2015. The auditors have carried out "Limited
Review" of the above results.
In accordance with the provisions of the Companies Act 2013, effective from 1st April, 2014, the Company has
reassessed the remaining useful lives of its fixed assets prescribed by Schedule II to the Act or actual useful life
of assets, whichever is lower. In case of any asset whose life has completed as above, the carrying value, net of
residual value of ` 68.51 lacs, as at 1st April 2014 has been adjusted to the General Reserve and in other cases
the carrying value has been depreciated over the remaining of the revised life of the assets and recognized in the
Statement of Profit and Loss.
Received during the quarter
The Company has exercised the option available to it under Rule 46A of the Companies (Accounting Standards)
(Second Amendment) Rules, 2011 in respect of accounting for fluctuations in foreign exchange relating to "Long
Term Foreign Currency Monetary Items". Accordingly, it has adjusted a loss of ` 86.10 lacs to the cost of its fixed
assets on account of such difference arising during the current quarter and has provided for depreciation thereon
over the balance useful life of the respective assets. Consequently, the charge to the Profit and Loss Account is
effected to that extent.
-Percentage of shares (as a % of the total share capital of the company)
-Percentage of Shareholding
Promoters and Promoter Group Shareholding
Particulars
Pending at the beginning of the quarter
Three Months ended 31st December, 2014
97
5
6
Place: New Delhi
Dated : 2nd February, 2015
By order of the Board
Saurabh Mittal
Managing Director & CEO
The standalone unaudited financial results for the quarter and nine-months ended December 31, 2014 are drawn
for the first time in the format provided in Clause 41 of the equity listing agreement hence the figures for the
quarter and nine months ended December, 2013 and figures for the quarter ended September 30, 2014 have not
been given. Further, the audited figures for the year ended March 31, 2014 have not been recasted post making
the Scheme effective and accordingly figures are not comparable with figures for the current year.
In accordance with the said Scheme, the equity shares of the Company would be listed with National Stock
Exchange of India Limited and BSE Limited. The Company has submitted application seeking exemption from
Rule 19(2)(b) of the SCRR, 1957 and the same is pending for approval.
98
(` in lacs)
Year ended
31.12.2014 31.12.2014 31.03.2014
(Unaudited) (Unaudited) (Audited)
19291.41 54769.65 -
2184.83 6568.50 -
- - -
21476.24 61338.15 -
- - -
21476.24 61338.15 -
1788.06 4751.69 -
36.38 1122.43 -
- - -
1824.44 5874.12 -
703.57 1984.77 -
(ii) Other Unallocable expenditure net of unallocable Income 430.15 1128.97 0.80
690.72 2760.38 (0.80)
35526.45 35526.45 -
13002.84 13002.84 -
900.47 900.47 2.90
49429.76 49429.76 2.90
1
Place: New Delhi Saurabh Mittal
Dated : 2nd February, 2015 Managing Director & CEO
By order of the Board
b) Decorative Veneer & Allied Products
Less: Inter Segment Revenue
The above results have been reviewed by the Audit Committee and approved by the Board of Directors of the
Company at their respective meetings held on 2nd February, 2015. The auditors have carried out "Limited
Review" of the above results.
a) Laminates & Allied Products
Total
3. Capital employed
a) Laminates & Allied Products
Total
Corporate Office: 1501-1505, Narain Manzil, 23, Barakhamba Road, New Delhi - 110 001
Corporate Identity Number : U21016AS2013PLC011624, Phone : +91 11 4279 1399, Fax : +91 11 4279 1330
Website : www.greenlam.com E-mail : [email protected]
Segmentwise Revenue, Results and Capital Employed
Net Sales/Income from Operations
Total
c) Unallocated
a) Laminates & Allied Products
b) Decorative Veneer & Allied Products
2. Segment Result [Profit/(Loss) before tax and interest]
Regd.Office : Makum Road, Tinsukia, Assam - 786 125
Quarter ended
Particulars
GREENLAM INDUSTRIES LIMITED
Nine-months
ended
b) Decorative Veneer & Allied Products
c) Unallocated
c) Unallocated
1. Segment Revenue (Net)
Total Profit before Tax
Less: (i) Interest
99
Auditors Report for the period commencing from 1 April 2014 to 30 September 2014
100
101
102
103
104
105
106
107
108
Auditors Report for financial year ending 31 March 2014
109
110
111
112
113
114
115
116
117
XX. MANAGEMENT DISCUSSION AND ANALYSIS
Decorative Business
Our Company‘s current business is resultant of de-merger of the Decorative business of Greenply
Industries Limited pursuant to the Composite Scheme of Arrangement. Post the said Scheme, our
Company‘s business has been designed to be an interior infrastructure company engaged in the
manufacture of laminates, decorative veneers and their allied products and are one of the largest in
India in the segments in which we operate.
Our products and installed capacities are as follows:
Manufacturing Unit
Product
Installed
Capacity
Our major brands
Behror, Rajasthan Laminates 5.34 million
Sheets
Greenlam, Green touch,
Green Gloss, Greenlam
Supertuf, New Mika,
Sturdo, Green Decowood,
Clads, Mikasa, MFC
Decorative veneers 4.20 million
sqm
Engineered Wood
Flooring
1.00 million
sqm
Prelaminated
Particle Board
30,000 CBM
Nalagarh, Himachal Pradesh Laminates 4.68 million
sheets
We have been awarded with ISO 9001, ISO 14001 and OHSAS 18001 certifications for our
manufacturing facilities at Behror and Nalagarh. We have also received Greenguard Certification for
―Low Emitting Products and Materials‖ for our product Greenlam Laminates.
We have a pan-India presence and export our laminate products to various countries including the
United States of America, Europe, Russia, United Kingdom, Israel, Middle East Countries, Singapore,
Thailand, Malaysia, Taiwan, Hong Kong.
Factors Affecting Results of Operations
1. Changes in Government Policies relating to laminate industry
Our manufacturing activities are subject to environmental laws and regulations promulgated
by the Ministry of Environment of Government of India, State Pollution Control Board
among other laws which regulate discharge of effluents, polluted emissions, hazardous
substances and so on. Any changes in the policies relating to our industry could materially
impact our operations.
2. Raw Material Availability and cost
We import raw materials for both of our manufacturing facilities, which are at a distance from
the port and depend on the internal infrastructure, any deterioration in the infrastructure may
result in reduction of raw material availability and consequently increase our raw material
costs and could significantly affect our operating results.
118
3. Changes in the demand for decorative products
The demand for interior infrastructure products is primarily dependent on the demand for real
estate, which influences the demand for laminates and other interior infrastructure products.
Periods of slowdown in the economic growth of India have significantly affected the real
estate sector in the recent past. Any further downturn in the real estate industry and/or
changes in governmental policies affecting the growth of this sector may have an adverse
effect on the demand for laminates and other infrastructure products and the results of our
operations.
4. Changes in the foreign exchange control regulations, interest rates and tax laws in India
Taxes and other levies imposed by the Central or State Governments in India that affect the
industry we operate in, includes customs duties, excise duties, sales tax, value added tax,
income tax and other taxes, duties or surcharges introduced on a permanent or temporary
basis from time to time. Any new taxes/ changes in existing tax policies by the Government
of India or other State Governments may have a material adverse effect on our business,
financial condition and results of operations.
5. Macroeconomic factors
Macroeconomic factors such as a recession or any other economic instability, political
uncertainty, social upheavals or acts of God affecting India or our other geographic markets.
Significant Accounting Policies
For significant Accounting policies please refer to ―Financial Statements‖.
Changes in accounting policies
There has been no change in accounting policies of our Company.
Business Performance Review
On a pre-scheme basis, for the period ended 30 September 2014, our Company incurred expenses of
Rs. 92,434 towards auditor expenses, advertising expenses, writing off preliminary expenses and
other miscellaneous expenses. The net loss for period ended 30 September 2014 was Rs. 92,434.
Quantitative and Qualitative Disclosures about Market Risk
In the normal course of business, our Company is exposed to certain market risks such as interest rate
risk, competitor risk and human resource risk.
Interest Rate Risk
The Company is exposed to interest rate risk on its floating rate debt and on additional debt
financing that may be needed for various reasons, including funding capital expenditures and the
repayment or refinancing of outstanding debt. Upward fluctuations in interest rates increase the
costs of both existing and new debt.
Competitor Risk
The market is competitive and fragmented. Company continues to focus on increasing its market
share and taking marketing initiatives that help create differentiation and provide optimum service to
its customers.
119
Human Resource Risk
Company‘s ability to deliver value is shaped by its ability to attract, train, motivate, empower and
retain the best professional talents. It shall continuously benchmark HR policies and practices
with the best in the industry and shall carry out necessary improvements to attract and retain the
best talent.
Unusual or Infrequent Events or Transactions
Except as discussed above, there have been no events or transactions to our knowledge which may be
described as unusual or infrequent.
Significant Economic Changes
Except as discussed above, to our knowledge there are no known factors which will have a material
adverse impact on our operations and profitability.
Known trends or uncertainties
Our Company‘s business has been impacted and is expected to continue to be impacted by the trends
identified above in the section titled ―Management Discussion and Analysis‖ and the uncertainties
described in the section titled ―Risk Factors‖. To the best of our knowledge, except as has been
described in this Information Memorandum, there are no known factors, which our Company would
expect to have a material adverse impact on its revenues or income from continuing operations.
Future relationship between costs and income
Other than as described in the chapters ―Risk Factors‖ and ―Management Discussion and Analysis‖
and elsewhere in the Information Memorandum, to our Company‘s knowledge, there are no known
factors which will have a material adverse impact on its operation and finances.
Increase in revenue
In addition to increases in the volume of sales of our Company‘s products, the introduction of the new
products and/or brands would also likely contribute to increases in our Company‘s revenues.
Total turnover of each major industry segment
Except as disclosed under ―Industry Overview‖ section, we don‘t have total turnover of each major
industry segment in which we operated.
New product or business segment
Other than as described in the section titled ―Business Overview‖, to the Company‘s knowledge, there
are no new products or business segments.
Seasonality
We are a company dealing with decorative products, demand for which is not seasonal in nature.
Significant dependence on a single or few suppliers or customers
We are not significantly dependent on a single or few suppliers or customers.
120
Competitive Conditions
For details of competitive conditions we face, see sections titled ―Risk Factors‖ and ―Business
Overview‖ of this Information Memorandum.
MATERIAL DEVELOPTMENTS SUBSEQUENT TO LAST FINANCIAL YEAR
The Hon‘ble Gauhati High Court, vide order dated 31 October 2014 has sanctioned the Scheme.
Pursuant to the Scheme, the Demerged Undertaking of Greenply have been vested with our
Company with effect from 1 April 2013 (i.e. the Appointed Date under the Composite Scheme of
Arrangement) under Sections 391 to 394 read with Sections 100 to 104 of the Companies Act.
The aforesaid order of the Gauhati High Court was filed by our Company with the RoC on 17
November 2014 which is the Effective Date of the Scheme.
As per the Scheme, the shareholders of Greenply as on the Record Date have been allotted 1
(One) equity share of Rs. 5.00 each in Greenlam, credited as fully paid up for every 1 (One)
equity share of INR 5.00 each held by them in Greenply.
Our Company has received copy of letter dated 10 February 2015 from SEBI and addressed to
NSE granting relaxation to the Company from the applicability of Rule 19(2) (b) of the SCRR.
121
SECTION VI – LEGAL AND OTHER INFORMATION
XXI. OUTSTANDING LITIGATIONS, DEFAULTS AND MATERIAL DEVELOPMENTS
All suits, actions and proceedings of whatever nature by or against Greenply pending and/or
arising on or before the Effective Date of the Scheme shall not abate, or be discontinued, or
be in any way prejudicially affected by the transfer of the Demerged Undertakings pursuant to
the Scheme but be continued, prosecuted and enforced by or against the Resulting Company,
viz., Greenlam Industries Limited as effectually as if the same had been pending and/or
arising against the Resulting Company.
Except as described below, there are no material outstanding or pending litigations, suits,
criminal or civil prosecutions, proceedings or tax liabilities against our Company, our
Directors, our Promoter or our Group Companies that would have a material adverse effect on
our business and there are no defaults, non-payment or overdue of statutory dues,
institutional/ bank dues or dues payable to holders of debentures, bonds and fixed deposits,
that would have a material adverse effect on our business.
All references to the ―Company‖, ―we‖, ―our‖ and ―Group Companies‖ in this Section VI
shall relate to the companies for whom disclosures have been made in this Section under the
respective headings.
LEGAL PROCEEDINGS
A. Litigations involving the Company
(1) Cases Filed Against the Company
Sr.
No.
Parties
Forum
Brief Description
Amount
Involved
BEHROR UNIT, RAJASTHAN
1. Commissioner of
Central Excise,
Jaipur (―CCE,
Jaipur‖) and
Greenlam.
Rajasthan High
Court, Jaipur
Bench, Jaipur
The appeal has been filed by
CCE, Jaipur against the order
dated March 15, 2010 passed by
the Customs, Excise & Service
Tax Appellate Tribunal, New
Delhi for setting aside the order-
in-appeal, bearing no. 118 (DK)
CE / JPR-I / 2009 and dated
June 15, 2009, passed by the
Commissioner (Appeals-1),
Central Excise, Jaipur. The issue
involves a demand for the
reversal of Cenvat Credit
obtained by Greenply in respect
of ‗Short Cycle Press Machine‘
due to its subsequent removal by
Greenply to its other unit at
Rudrapur, Uttarakhand after
payment of duty amounting to
Rs. 6,88,000/- which has been
alleged to be irregular. It has
been alleged that the Company
Rs.
11,07,117/-
(interest, as
applicable).
122
Sr.
No.
Parties
Forum
Brief Description
Amount
Involved
removed the said machine
without payment of duty equal
to the Cenvat credit availed by it
originally. The matter is
currently pending.
2. Office of the
Commissioner of
Customs
(Export),
Maharashtra and
Greenlam
Office of the
Commissioner of
Customs
(Export),
Maharashtra
A demand cum show-cause
notice, bearing no. F. No. S/16-
Gen-125//13/Gr. 71 and dated
April 18, 2014, has been issued
by the Office of the
Commissioner of Customs
(Export), Maharashtra to
Greenply directing it to explain
as to why a wrongful debit of
custom duty amounting to Rs.
2,64,257.56/- for imported
goods in respect of bill of entry
no. 3329599 that has been made
by it under licence no.
0210158403 should not be
demanded from Greenply under
Section 28(1) of the Customs
Act, 1962. Greenply, vide its
reply dated June 30, 2014, has
denied all the allegations made
against it and has stated that the
impugned bill of entry does
cover crystal melamine.
Greenply has also submitted the
said custom duty amount has
been correctly debited and
show-cause notice be dropped.
The matter is currently pending.
Rs.
2,64,257.56/-
(interest, as
applicable)
3. Additional
Commissioner,
Central Excise
Commissionerate,
Jaipur, Rajasthan
and Greenlam
Additional
Commissioner,
Central Excise
Commissionerate,
Jaipur, Rajasthan
A show-cause notice, bearing
no. IV (6) 12 / AE / JPR – I /
2014 / 581 and dated July 24,
2014, has been issued by the
Additional Commissioner,
Central Excise
Commissionerate, Jaipur,
Rajasthan to Greenply for
explaining, within 30 days from
the date of receipt of the said
show-cause notice, the non-
payment by it of custom duty of
Rs. 19,08,168/- in respect of
consignment of an imported
plywood. It has been alleged
Rs.
19,08,168/-
along with
interest.
Additionally,
the said
custom duty
amount of
19,08,168/-
has already
been paid by
Greenply but
the same shall
not be
appropriated.
123
Sr.
No.
Parties
Forum
Brief Description
Amount
Involved
that the said consignment was
cleared under transit bond from
Inland Container Depot, TKD,
New Delhi to Greenply‘s private
bonded warehouse at Behror but
was diverted by Greenply to its
factory premises at Behror
without first physically
inwarding the same at its private
bonded warehouse at Behror and
a green bill of entry has not been
filed by it in this regard. The
matter is currently pending.
Moreover,
penalty equal
to the amount
of custom
duty not paid
and additional
penalty under
Section 112 of
the Customs
Act, 1962.
4. Assistant
Commissioner,
Circle-B,
Commercial
Taxes, Bhiwadi
and Greenlam.
Rajasthan Tax
Board, Ajmer,
Rajasthan
2 (two) separate appeals have
been filed by Assistant
Commissioner, Commercial
Taxes, Bhiwadi against the
orders passed by the Deputy
Commissioner (Appeals),
Commercial Taxes, Bharatpur
on February 07, 2008
(Assessment Year: 2003 – 2004)
and March 12, 2008
(Assessment Year: 2004 –
2005). It has been submitted in
the appeals that Greenply has
been wrongly allowed the set-
off of entry tax for the
Assessment Years 2003 – 2004
and 2004 – 2005 despite not
paying any sales tax in this
regard in the State. It has also
been submitted that a transfer of
goods by Greenply from one
branch to another does not
constitute a sale. Consequently,
if no sales tax has been paid by
Greenply, then the set-off
against entry tax made by it is
wrong. The matter is currently
pending.
Rs.
76,60,696/-
(Assessment
Year: 2003 –
2004) and Rs.
30,43,888/-
(Assessment
Year: 2004 –
2005)
5. Commercial Tax
Officer, Circle
Alwar and
Greenlam.
Office of the
Appellate
Authority,
Commercial Tax,
Alwar
A notice for demand, dated
March 15, 2014, has been issued
on Greenply by the Assistant
Commissioner, Commercial
Tax, Circle Alwar for an amount
of Rs. 70,27,665/-. An appeal
has been made by Greenply
Rs.
70,27,665/-
124
Sr.
No.
Parties
Forum
Brief Description
Amount
Involved
against the said order and a stay
order dated May 01, 2014 has
been issued by Office of the
Appellate Authority,
Commercial Tax, Alwar for
staying the said demand subject
to compliance with terms and
conditions set out thereunder.
The matter is currently pending.
6. R.P. Castings
Private Limited
(―RP‖), Central
Excise
Department,
Alwar and
Greenlam
Rajasthan High
Court
On account of non-payment of
certain dues owed by RP to the
Central Excise Department, the
Deputy Commissioner, Central
Excise, Alwar conducted a
public auction on 5 February
2014 pursuant to which the
property bearing Plot No. E –
174 – 175, RIICO Industrial
Area, Phase – II, Behror,
District Alwar, Rajasthan was
sold to Greenply, which sale
was been confirmed and made
absolute on 21 March 2014 vide
order issued by Assistant
Commissioner, Central Excise
Division, Alwar.
Against the said sale and
transfer of the property, RP has
filed an appeal before the
Rajasthan High Court against
the Central Excise Department,
in which appeal RP has
requested the Hon‘ble High
Court to make Greenply a party
to the appeal. The appeal is
currently pending.
Amount
involved
cannot be
ascertained.
7. Labour Cases
(a) Three (3) cases relating to reinstatement of service have been instituted against
Greenlam before the Labour Court and Industrial Tribunal, Alwar, Rajasthan. The
cases have been instituted by Nand Lal (LCR No. 769 of 2006), Ratan Singh (LCR
No. 610 of 2006) and Dal Chand Tewari (LCR No. 183 of 2006). The claim amount
involved in the said proceedings cannot be ascertained. All the cases are currently
pending.
(b) Separately, Mr. Shyam Sunder Gaur has filed an application under Rule 22(A) of
the rules framed under the Rajasthan Industrial Disputes Act before the Labour
Court and the Industrial Tribunal, Bharatpur, Alwar, Rajasthan, being case no Misc.
125
Sr.
No.
Parties
Forum
Brief Description
Amount
Involved
No. 41 of 2006, for setting aside the ex-parte award dated May 29, 2001 passed in
Case No. 77 of 2000 relating to termination of services of Mr. Shyam Sunder Gaur
from Greenlam. Greenlam has filed its reply to the application. The claim amount
involved in the proceeding cannot be ascertained. The matter is currently pending.
NALAGARH UNIT, HIMACHAL PRADESH
8. Office of the
Assistant
Commissioner,
Central Excise
Division, Shimla
and Greenlam
Office of the
Assistant
Commissioner,
Central Excise
Division, Shimla
A show-cause notice, bearing no.
IV(16)STC/SCN/Greenply/SML
/37/12-13/20287 and dated
March 14, 2013, has been issued
to Greenply on an issue identical
to the one raised under Service
Tax Exemption Show-cause
Notice. However, this show-
cause notice relates to the period
from 2009 – 2010 to 2012 –
2013 (up to December 2012).
Greenply, vide its response dated
December 30, 2013, has
submitted that due to certain
delay in filing of relevant
declarations, the substantive
benefit of exemption under the
notification no. 18 / 2009 – ST
should not be denied to
Greenply. The matter is
currently pending.
Rs.
3,83,649/-
plus interest
and penalty.
9. Central Excise &
Service Tax
Commissionerate,
Chandigarh – I
and Greenlam
Central Excise &
Service Tax
Commissionerate
, Chandigarh – I
A show-cause notice, bearing no.
V(48)SCN/ADC/SML/66/12/72
8 and dated March 21, 2013, has
been issued by Central Excise &
Service Tax Commissionerate to
Greenply alleging that the plastic
scrap generated during the
process of manufacturing
laminate has been
cleared/removed by it without
payment of the central excise
duty applicable thereupon. The
said show-cause notice relates to
the plastic scrap generated by
Greenply during the financial
years 2009 – 2010 till 2012 –
2013 (up to December 31, 2012).
Greenply vide its reply has
denied all the allegations made
against it in the said show-cause
notice and has submitted that
generation of plastic scrap
Rs.
14,23,019/-
plus interest
and penalty
126
Sr.
No.
Parties
Forum
Brief Description
Amount
Involved
neither constitutes ‗manufacture‘
nor the generated plastic scrap
constitutes ‗goods‘ under the
Central Excise Act, 1944. The
matter is currently pending.
10. Income Tax
Officer (TDS),
Solan and
Greenlam
Office of the
Commissioner of
Income Tax
(TDS), Solan
Office of the Commissioner of
Income Tax (TDS), Solan has
vide letter no.
ITO(TDS)/SLN/2013-14/2087
dated November 06, 2013 issued
the following notices of demand
on Greenply:
(a) In respect of the 4th quarter
of Financial Year 2009-10,
return in Form-27Q, vide
assessment notice dated
October 03, 2011,
subsequently corrected in
the revised return vide
acknowledgement. No
061560100021733 dated
December 26, 2011 for an
amount of Rs.2748/-. In
relation to the above,
Greenply has filed its reply
on January 02, 2014 and
made online revision,
pursuant to which the
aforementioned demand
has been withdrawn.
(b) In respect of the 4th quarter
of Financial Year 2009-10,
return in Form-26Q, vide
assessment notice dated
October 03, 2011,
subsequently corrected in
the revised return vide
acknowledgement. No
011390200168056 dated
June 03, 2012 for an
amount of Rs.1502. In
relation to the above,
Greenply has filed its reply
on January 02, 2014 and
made online revision in
respect thereof, pursuant to
which the aforementioned
demand has been
Rs.
3,47,530/-
127
Sr.
No.
Parties
Forum
Brief Description
Amount
Involved
withdrawn.
(c) In respect of the 4th quarter
of Financial Year 2009-10,
return in Form-27EQ, vide
assessment notice dated
October 03, 2011,
subsequently corrected in
the revised return vide
acknowledgement. No
061560100021044, dated
November 28, 2011 for an
amount of Rs.8020/-. /-. In
relation to this, Greenply
has filed its replies on
January 02, 2014 and
made online revision in
respect thereof. At present
the demand in respect of
the aforementioned is Rs.
8020/-.
(d) In respect of the 4th quarter
of Financial Year 2010-11,
return in Form-24Q, vide
assessment notice dated
November 16, 2011,
subsequently corrected in
the revised return vide
acknowledgement. No
073689600001146 dated
March 01, 2014, for an
amount of Rs. 2556/-. In
relation to this, Greenply
has filed its replies on
January 02, 2014 and
made online revision in
respect thereof. At present
the demand in respect of
the aforementioned is Rs.
48,740/-.
(e) In respect of the 1st quarter
of Financial Year 2010-11,
return in Form-27Q, vide
assessment notice dated
August 18, 2011,
subsequently corrected in
the revised return vide
acknowledgement. No
061560100021136 dated
128
Sr.
No.
Parties
Forum
Brief Description
Amount
Involved
December 02, 2011, for an
amount of Rs.2,03,170/-.
In relation to this,
Greenply has filed its
replies on January 02,
2014 and made online
revision in respect thereof.
At present the demand in
respect of the
aforementioned is Rs.
2,90,770/.
(f) In respect of the 4th quarter
of Financial Year 2010-11,
return in Form-26Q, vide
assessment notice dated
May 08, 2012,
subsequently corrected in
the revised return vide
acknowledgement. no
073689600001150 dated
March 01, 2014, for an
amount of Rs.580/-. In
relation to the above,
Greenply had filed its
replies on January 02,
2014 and made online
revision in respect thereof,
pursuant to which the
aforementioned demand
has been withdrawn.
(g) In respect of the 4th quarter
of Financial Year 2011-12,
return in Form-24Q, vide
assessment notice dated
February 12, 2013,
subsequently corrected in
the revised return vide
acknowledgement. no
073689600001172 dated
march 01, 2014, for an
amount of Rs.1,95,080/-.
In relation to the above,
Greenply had filed its
replies on January 02,
2014 and made online
revision in respect thereof,
pursuant to which the
aforementioned demand
has been withdrawn
129
Sr.
No.
Parties
Forum
Brief Description
Amount
Involved
(h) In respect of the 4th quarter
of Financial Year 2011-12,
return in Form-26Q, vide
assessment notice dated
February 12, 2013,
subsequently corrected in
the revised return vide
acknowledgement. no
073689600001183 dated
March 01, 2014, for an
amount of Rs.22,180/-. In
relation to the above,
Greenply had filed its
replies on January 02,
2014 and made online
revision in respect thereof,
pursuant to which the
aforementioned demand
has been withdrawn.
(i) In respect of the 4th quarter
of Financial Year 2011-12,
return in Form-2&EQ,
vide assessment notice
dated February 12, 2013,
subsequently corrected in
the revised return vide
acknowledgement. no
073689600001205 dated
March 01, 2014, for an
amount of Rs.7,840/-. In
relation to the above,
Greenply had filed its
replies on January 02,
2014 and made online
revision in respect thereof,
pursuant to which the
aforementioned demand
has been withdrawn
(2) Cases Filed by the Company
S.
No.
Parties
Forum
Brief Description
Amount
Involved
(In Rs.)
BEHROR UNIT, RAJASTHAN
130
S.
No.
Parties
Forum
Brief Description
Amount
Involved
(In Rs.)
1. Deputy
Commissioner of
Customs (Group
– I),
Tughlakabad,
Delhi and
Greenlam
Deputy
Commissioner of
Customs (Group
– I),
Tughlakabad,
Delhi
An appeal has been filed by
Greenply against denial of the
grant of the benefit of
concessional rate of duty to
Greenply in terms of
Notification No. 96/2008 (Cus.)
dated August 13, 2008 for the
bill of entry no. 8721286 dated
February 10, 2012 in respect of
import of plywood from
Myanmar. The matter is
currently pending.
12,00,000/-
2. Greenlam, State
of Rajasthan, the
Commissioner,
Commercial Tax,
Rajasthan and the
Assistant
Commissioner,
Commercial
Taxes
Department,
Bhiwadi.
Supreme Court of
India
In addition to writ petition filed
by other petitioners, a writ
petition, bearing no. 84 of 2007,
was filed by Greenply to
challenge the constitutional
validity of the provisions of the
Rajasthan Tax on Entry of
Goods into Local Areas Act,
1999. The Hon‘ble Rajasthan
High Court, vide its order dated
January 21, 2011, had directed
that recovery of tax in pursuance
of assessment orders and
demand notices that have been
issued in the case of all
petitioners, including, Greenply
shall remain stayed on the
condition of all petitioners,
including Greenply depositing
50% of the assessed tax
excluding any amount of penalty
and/or interest imposed by the
assessing authority.
Subsequently, in view of a
similar matter being pending
before the Hon‘ble Supreme
Court of India, the Rajasthan
High Court vide its order dated
December 18, 2014, has
dismissed the writ petitions and
vacated all the stay orders.
Against the aforementioned
order of the High Court, a
special leave petition (SLP)
bearing number 4481/2015
before the Hon‘ble Supreme
Court of India has been filed,
Rs.
94,53,043/-
(interest as
applicable).
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Amount
Involved
(In Rs.)
pursuant to which the Hon‘ble
Supreme Court has vide its order
dated 13 February 2015 issued
interim directions, the
compliance in respect of which
is in process of being
undertaken.
3. Deputy
Commissioner,
Customs &
Central Excise
Division, Alwar,
Rajasthan and
Greenlam
Commissioner
(Appeals),
Customs &
Central Excise
Division, Alwar,
Rajasthan
An appeal has been filed by
Greenply against the order
bearing OIO no. 191/R/2014
dated 28 August 2014 issued by
Deputy Commissioner, Customs
& Central Excise Division,
Alwar, Rajasthan rejecting
Greenply‘s refund/rebate claim
of Rs. 3,90,641/- in respect of
service tax paid by it for the
period from July, 2013 to
September, 2013 should not be
rejected in view of clause (c) of
Notification No. 41/2012-ST
dated June 29, 2012. The said
appeal is currently pending.
Rs.
3,90,641/-
4. Assistant
Commissioner,
Circle-B,
Commercial
Taxes, Bhiwadi
and Greenlam.
Rajasthan Tax
Board, Ajmer,
Rajasthan
An appeal has been filed by
Greenply against the order
passed by the Deputy
Commissioner (Appeals),
Commercial Taxes, Bharatpur on
November 08, 2011 for the
period of 2005-06. It has been
submitted in the appeal by
Greenply that the appellate
authority erred in rejecting the
appeal and upholding the order
of the assessing authority
disallowing the set-off claim of
Greenply on account of payment
of entry tax. The matter is
currently pending.
Rs.
55,73,546/-
5. RP and Greenlam Additional Chief
Judicial
Magistrate,
Behror
RP entered into an agreement to
sell without possession dated
November 03, 2006 with
Greenply (which agreement is
registered in the office of the
concerned Sub-registrar, Behror,
Alwar, Rajasthan) in respect of
Amount
involved
cannot be
ascertained.
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Amount
Involved
(In Rs.)
sale of property bearing Plot No.
E – 174 – 175, RIICO Industrial
Area, Phase – II, Behror, District
Alwar, Rajasthan by it to
Greenply. Subsequently, a suit
has been filed by Greenply
against RP for seeking specific
performance of the said
agreement and seeking
injunction against RP for the
sale/disposal of the said
property. The suit is currently
pending.
NALAGARH UNIT, HIMACHAL PRADESH
6. Office of the
Commissioner,
Central Excise
Commissionerate
– I, Chandigarh
(―OC, CE
Commissionerat
e‖) and Greenlam
Customs, Excise
& Service Tax
Appellate
Tribunal, New
Delhi
An order-in-original bearing no.
CHD-CEX-001-COM-35-38
dated December 27, 2013 was
passed by the OC, CE
Commissionerate demanding
that an amount of Rs.
13,21,65,574/- was leviable on
and payable by Greenply for a
period from June 2009 till
February 28, 2013 along with
additional interest and an
equivalent amount of penalty of
Rs. 13,21,65,574/- . The said
demand was levied alleging that
the resins manufactured by
Greenply at its unit (viz.
melamine formaldehyde resin
and phenolic formaldehyde
resin) for captive consumption
(i.e., for further use in the
manufacture of various
laminated boards) is chargeable
to central excise duty by virtue
of such resins being: (a)
comprising in the negative list to
the area based notification,
bearing no. 50/2003 and dated
June 10, 2003; and (b)
specifically excluded from the
captive consumption
notification, bearing no. 67/95-
C.E. and dated March 16, 1995.
Against the said order, Greenply
Rs.
26,43,31,148/
- (including,
penalty) plus
interest.
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Amount
Involved
(In Rs.)
has, in its appeal dated March
31, 2014, denied all the
allegations made therein in the
order and has submitted, among
other submissions, that: (i) such
resins emerge during
intermediate stage and is not a
marketable commodity, thereby
not constituting excisable goods;
and (ii) the classification
proposed by DGCEI and
subsequently accepted by the
OC, CE Commissionerate is
incorrect. The Customs, Excise
& Service Tax Appellate
Tribunal, New Delhi has
admitted the appeal and issued
an interim order bearing order
number SO/54117/2014-
EX[DB] and dated 21 November
2014 directing the Company to
deposit Rs. 1 (one) Crore (in
respect of the pre-deposit
balance amount) and that subject
to deposit of the said amount, the
pre-deposit of balance amount of
duty and the entire amount of
penalty shall be waived and its
recovery stayed during the
pendency of appeal. Pursuant to
the aforementioned direction, the
Company has made the deposit
of the said Rs. 1 (one) Crore.
The appeal is currently pending.
7. Greenlam &
Others
And State of
Himachal
Pradesh through
Principal
Secretary (Excise
& Taxation) to
the Government
of Himachal
Pradesh, Shimla-
2 & Others
Hon‘ble High
Court of
Himachal
Pradesh, Shimla
In addition to the writ petitions
filed by various petitioners,
Greenply has filed a writ petition
bearing CWP No. 841/2011
before the Hon‘ble High Court
of Himachal Pradesh challenging
the constitutional validity of the
Himachal Pradesh Tax on Entry
of Goods into Local Areas Act,
2010 (―HP Entry Tax Act‖).
The High Court had passed
interim orders dated July 20,
2010 and July 30, 2010,
directing that under the HP Entry
Amount
involved
cannot be
ascertained
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(In Rs.)
Tax Act, the collection of entry
tax by the appropriate authorities
from the petitioner companies
will be enforced only after the
assessment order is served on the
assesse (petitioner companies).
Further, as per the said interim
orders, the High Court directed
that, in respect of the assessed
amount, the assessees (petitioner
companies) were required to
deposit one-third of the assessed
amount and submit security in
respect of the remaining two-
third amount of the assessed
liabilities to the satisfaction of
the assessing authority.
In light of certain petitions
pending before the Supreme
Court involving identical issues
on challenge of constitutional
validity of state laws on entry
tax, the Hon‘ble High Court of
Himachal Pradesh, vide its order
dated August 05, 2014, disposed
of the writ petitions including
Greenply‘s writ petition, with an
observation that the writ
petitioners shall abide by the
judgment of the Supreme Court
in respect of the matters pending
before it read with the interim
orders passed by the High Court.
The High Court has, in its order,
also stated that the writ
petitioners may lay motion in
terms of the judgment of the
Supreme Court, in case need
arises.
In furtherance of the
aforementioned order and the
interim orders dated July 20,
2010 and July 30, 2010 passed
by the High Court, Greenply has
been depositing the requisite
amount and has been procuring
the bank guarantee in favour of
the government authority.
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(In Rs.)
CASES INVOLVING DISHONOUR OF CHEQUES
8. S.F.Z Enterprises
(―SFZ‖)
&
Greenlam
Fast Track Court-
III at Saidapet,
Chennai
In relation to a specified quantity
of laminates supplied by
Greenply to SFZ on 20 June
2007, Greenply had raised
invoice(s) of Rs. 3,06,762/- to
SFZ. In respect of the said
amount, SFZ had issued cheques
dated 24 November 2007 and 31
December 2007 aggregating to
amount of Rs. 2,00,000/-, which
cheques were dishonored by the
Allahabad Bank, T.Nagar
Branch, Chennai. Greenply
issued a notice under Section
138 of NI Act to SFZ for
payment of the invoiced amount.
Subsequently, on account of
SFZ‘s failure to make payment
to Greenply during the notice
period under the NI Act,
Greenply instituted criminal
proceedings against SFZ by
filing complaint bearing CC No.
10329 of 2008 before the Fast
Track Court-III, Saidapet,
Chennai. At present the criminal
proceedings are pending.
Rs.
2,00,000/-
9. M/S Jos Wood
Arts (―JWA‖)
&
Greenlam
Metropolitan
Magistrate, 13th
Court, Kolkata
In relation to a specified quantity
of veneer supplied by Greenply
to JWA on 13 October 2010 and
8 December 2010, Greenply had
raised invoice(s) of Rs.
5,13,684/- and Rs. 3,76,046/-
respectively to JWA In respect of
the said amount, JWA had issued
two cheques both dated 2 March
2011 for a total amount of Rs.
4,47,353/-which was deposited
with Standard Chartered Bank,
N.S Road Branch, Kolkata and
drawn on the State Bank of
Travancore, Edapally, which
cheques were dishonored.
Greenply issued a notice under
Section 138 of NI Act to JWA
for payment of the invoiced
Rs.
4,47,353/-
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Amount
Involved
(In Rs.)
amounts. Subsequently, on
account of JWA‘s failure to
make payment to Greenply
during the notice period under
the NI Act, Greenply instituted
criminal proceedings against
JWA by filing complaint no.
25948 of 2011 before the
Metropolitan Magistrate, 16th
Court, Kolkata, who by an order
dated 15 September 2014
directed that the complaint be
transferred to the appropriate
court at Travancore. At present,
appropriate steps are being taken
to institute criminal proceedings
at Travancore, Further, Greenply
has filed a criminal complaint
bearing no. 13914/2012 under
Section 200 of Code of Criminal
Procedure before the
Metropolitan Magistrate, 13th
Court, Kolkata against JWA for
recovery of the abovementioned
invoiced amount At present the
said criminal complaint is
pending.
10. M/S Gajanan
Glass & Plywood
(―GGP‖)
&
Greenlam
XII Additional
Chief
Metropolitan
Magistrate,
Bengaluru,
Karnataka
In relation to a specified quantity
of products supplied by Greenply
to GGP, Greenply had raised
invoice(s) of Rs. 7,43,321 to
GGP. In respect of the said
amount, GGP had issued two
cheques dated 26 November
2008 and 29 November 2008 for
a total amount of Rs. 3,88,321/-,
which was dishonored by the
State Bank of Mysore, Belgaum.
Greenply issued a notice under
Section 138 of NI Act to GGP
for payment of the invoiced
amount. Subsequently, on
account of GGP‘s failure to
make payment to Greenply
during the notice period under
the NI Act, Greenply instituted
criminal proceedings against
GGP by filing complaint nos.
3194/2009 and 9226/2010 before
Rs.
3,88,321/-
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Amount
Involved
(In Rs.)
the XII Additional Chief
Metropolitan Magistrate,
Bengaluru, Karnataka. At present
the criminal proceedings are
pending.
11. M/S Dhammur
Agencies (―DA‖)
&
Greenlam
Metropolitan
Magistrate, 16th
Court, Kolkata
In relation to laminates supplied
by Greenply to DA, Greenply
had raised various invoices from
time to time, Greenply had raised
invoice(s) in respect of which a
sum of Rs. 3,09,424/- was
outstanding. In respect of the
said amount, DA had issued a
cheque dated 15 February 2012
for an amount of Rs. 3,09,424,
which was drawn on Punjab
National Bank, Gulbarga Branch,
Karnataka and deposited with
and dishonored by Standard
Chartered Bank, N.S. Road,
Kolkata. Greenply issued a
notice under Section 138 of NI
Act to DA for payment of the
said outstanding amount.
Subsequently, on account of
DA‘s failure to make payment to
Greenply during the notice
period under the NI Act,
Greenply instituted criminal
proceedings against DA by filing
petition no. 7385 of 2012 before
the Metropolitan Magistrate, 16th
Court, Kolkata on 3 May 2012.
Although, DA has made payment
of Rs. 2,62,401/-, an amount of
Rs. 47,021/- remains
outstanding. Further, vide order
dated 8 December, 2014, the
Metropolitan Magistrate, 16th
Court, Kolkata has directed that
the complaint be filed with the
court having appropriate
jurisdiction to deal with the
matter. At present, the said
criminal proceedings are in the
process of being instituted before
the court with appropriate
jurisdiction.
Rs. 47,021/-
138
S.
No.
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Forum
Brief Description
Amount
Involved
(In Rs.)
12. M/S Highway
Trading Private
Limited
(―HTPL‖)
&
Greenlam
Metropolitan
Magistrate, 16th
Court, Kolkata
In relation to veneers supplied by
Greenply to HTPL, Greenply had
raised various invoices from time
to time against which a sum of
Rs. 1,72,926/- was outstanding.
In respect of the said amount,
HTPL had issued a cheque dated
30 June 2012 for an amount of
Rs. 1,25,000/- drawn on State
Bank of India, SME Branch,
Janpath Road, Bhubaneswar and
deposited with and dishonored
by Standard Chartered Bank,
N.S. Road, Kolkata. Greenply
issued a notice under Section 138
of NI Act to HTPL for payment
of the invoiced amount.
Subsequently, on account of
HTPL‘s failure to make payment
to Greenply during the notice
period under the NI Act,
Greenply instituted criminal
proceedings against HTPL by
filing complaint no. 22816 of
2012 before the Metropolitan
Magistrate, 16th Court, Kolkata,
which subsequently passed an
order dated 17 December 2014
directing that the complaint be
filed before the court having
appropriate jurisdiction to deal
with the matter. At present, the
said criminal proceedings are in
the process of being instituted
before the court with appropriate
jurisdiction.
Rs.
1,25,000/-
13. M/S Tirupati
Traders (―TT‖)
&
Greenlam
Metropolitan
Court, 16th Court,
Kolkata
In relation to a specified quantity
of products supplied by Greenply
to TT, Greenply had raised
various invoices to TT for
various amounts. For payment of
the remaining amounts so
invoiced, TT had issued post-
dated cheques dated 30 June
2012 for an amount of Rs.
34,82,953/-, which was drawn on
Indian Bank, Muzaffarpur
Branch and deposited with and
dishonored by Standard
Chartered Bank, N.S. Road,
Rs.
6,43,000/-
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Amount
Involved
(In Rs.)
Kolkata. Greenply issued a
notice under Section 138 of NI
Act to TT for payment of the
invoiced amount. Subsequently,
on account of TT‘s failure to
make payment to Greenply
during the notice period under
the NI Act, Greenply instituted
criminal proceedings against
TTP by filing complaint no.
24163 of 2012 before
Metropolitan Magistrate, 16th
Court, Kolkata. Greenply has
received part payment of certain
amounts and at present an
amount of Rs. 6,43,000/- is still
outstanding. At present the
criminal proceedings are
pending.
14. M/S Shiv Traders
(―ST‖)
&
Greenlam
Metropolitan
Magistrate, 7th
Court, Kolkata
In relation to supply of laminates
supplied by Greenply to ST,
Greenply had raised various
invoices from time to time in
respect of which an amount of
Rs. 1,48,304/- was outstanding.
In respect of the said amount, ST
had issued a cheque dated 7
December 2012 for an amount of
Rs. 1,48,304/-, which was drawn
on Shree Bharat Co-operative
Bank Limited, R.C Dutta Road
and deposited with and
dishonored by Standard
Chartered Bank, N.S. Road,
Kolkata. Greenply issued a
notice under Section 138 of NI
Act to ST for payment of the said
amount. Subsequently, on
account of ST‘s failure to make
payment to Greenply during the
notice period under the NI Act,
Greenply instituted criminal
proceedings against ST by filing
complaint no. 8281 of 2013
before Metropolitan Magistrate,
7th Court, Kolkata. At present the
criminal proceedings are
pending.
Rs.
1,48,304/-
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Amount
Involved
(In Rs.)
15. Bhawani Sales
Corporation
(―BSC‖)
&
Greenlam
Metropolitan
Magistrate, 7th
Court, Kolkata
In relation to supply of laminates
by Greenply to BSC, Greenply
had raised various invoices from
time to time in respect of which a
sum of Rs. 4,04,174/- was
outstanding. In respect of the
said amount, BSC had issued a
cheque dated 4 February 2013
for an amount of Rs. 4,04,174/-,
which was drawn on Punjab
National Bank, Radhepuri, Delhi
and deposited with and
dishonored by Standard
Chartered Bank, N.S. Road,
Kolkata. Greenply issued a
notice under Section 138 of NI
Act to BSC for payment of the
said amount. Subsequently, on
account of BSC‘s failure to make
payment to Greenply during the
notice period under the NI Act,
Greenply instituted criminal
proceedings against BSC by
filing complaint no. 11694 of
2013 before Metropolitan
Magistrate, 7th Court, Kolkata,
which subsequently passed an
order dated 6 December, 2014
directing that the complaint be
filed with the court having
appropriate jurisdiction to deal
with the matter. Consequently,
criminal proceedings before the
court with relevant jurisdiction
have been instituted and the
same is currently pending.
Rs.
4,04,174/-
16. M/S SS
Laminates
(―SSL‖)
&
Greenlam
Metropolitan
Magistrate, 7th
Court, Kolkata
In relation to supply of laminates
by Greenply to SSL, Greenply
had raised various invoices from
time to time in respect of which a
sum of Rs. 1,69,533.38/- to SSL.
In respect of the said amount,
SSL had issued a cheque dated
29 January 2013 for an amount
of Rs. 1,69,533.38/-, which was
drawn on TamilNad Mercantile
Bank, DB Road, Coimbatore and
deposited with and dishonored
by Standard Chartered Bank,
Rs.
1,69,533.38/-
141
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Brief Description
Amount
Involved
(In Rs.)
N.S. Road, Kolkata. Greenply
issued a notice under Section 138
of NI Act to SSL for payment of
the invoiced amount.
Subsequently, on account of
SSL‘s failure to make payment
to Greenply during the notice
period under the NI Act,
Greenply instituted criminal
proceedings against SSL by
filing complaint no. 11694 of
2013 before Metropolitan
Magistrate, 7th Court, Kolkata,
which subsequently issued an
order dated 6 December, 2014
directing that the complaint be
filed with the court having
appropriate jurisdiction to deal
with the matter. Consequently,
criminal proceedings before the
court with relevant jurisdiction
have been instituted and the
same is currently pending.
17. Farwood
Industries
Limited (―FIL‖)
&
Greenlam
Metropolitan
Magistrate, 18th
Court, Kolkata
In relation to supply of laminates
by Greenply to FIL, Greenply
had raised various invoices from
time to time in respect which an
amount of Rs. 3,13,251/- was
outstanding. In respect of the
said amount, FIL had issued a
cheque dated 28 May 2013,
which was drawn on State Bank
of India, Kasturba Nagar,
Chennai and deposited with and
dishonored by Standard
Chartered Bank, N.S. Road,
Kolkata. Greenply issued a
notice under Section 138 of NI
Act to FIL for payment of the
invoiced amount. Subsequently,
on account of FIL‘s failure to
make payment to Greenply
during the notice period under
the NI Act, Greenply instituted
criminal proceedings against FIL
by filing complaint no. 29046 of
2013 before Metropolitan
Magistrate, 18th Court, Kolkata.
Though the said outstanding
NIL
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Amount
Involved
(In Rs.)
amount has been paid by FIL, at
present criminal proceedings are
in the process of being
withdrawn.
18. M/S Sai Vaibhav
Traders (―SVT‖)
&
Greenlam
Metropolitan
Magistrate, 18th
Court, Kolkata
In relation to supply of laminates
by Greenply to SVT, Greenply
had raised various invoices from
time to time in respect of which
an amount of Rs. 3,83,833/- was
outstanding. In respect of the
said amount, SVT had issued a
cheque dated 21 March 2013 for
an amount of Rs. 3,83,833/-
which cheque was dishonored.
Greenply issued a notice under
Section 138 of NI Act to SVT for
payment of the said amount.
Subsequently, on account of
SVT‘s failure to make payment
to Greenply during the notice
period under the NI Act,
Greenply instituted criminal
proceedings against SVT by
filing complaint no. 29045 of
2013 before Metropolitan
Magistrate, 18th Court, Kolkata,
which subsequently passed an
order dated 17 November 2014
directing that the complaint be
filed with the court having
appropriate jurisdiction to deal
with the matter. Consequently,
criminal proceedings before the
court with relevant jurisdiction
have been instituted and the
same is currently pending.
Rs.
3,83,833/-
B. Litigations involving the Promoter and Promoter Group
(1) Cases filed against Mr. Shiv Prakash Mittal
Sr.
No.
Parties Forum Brief Description Amount
Involved
1. Deputy
Commissioner
Of Income Tax,
Central Circle -
Income Tax
Appellate Tribunal,
‗B‘ Bench, Kolkata
Branch
During the course of
assessment of the income
of Mr. Shiv Prakash Mittal
for the assessment year
Rs.
56,05,862/-
143
XI, Kolkata
&
Shiv Prakash
Mittal
2011-12, the Income Tax
Department alleged certain
undisclosed investment in
jewelry amounting to Rs.
56,05,862/-. Mr. Shiv
Prakash Mittal submitted
that the said jewelry
belonged to Shiv Prakash
Mittal (HUF) and not to
him personally. In view of
difference in the weight of
the said jewelry under the
Income Tax Department‘s
valuation report and that of
the Mr. Shiv Prakash
Mittal‘s valuation report,
an assessment order dated
March 21, 2013 under
Section 143(3) read with
Sections 153B(b) and
153D of Income Tax Act
was passed by the Deputy
Commissioner Of Income
Tax, Central Circle -XI,
Kolkata, adding an amount
of Rs. 56,05,862/- (Rupees
Fifty Six Lakhs Five
Thousand Eight Hundred
and Sixty Two) as
undisclosed investment in
respect of the difference in
the aforementioned two
valuation reports.
Against the said order, Mr.
Shiv Prakash Mittal filed
an appeal dated 18 April
2013 before the
Commissioner Of Income
Tax (Appeals) – C-1,
Kolkata, which by its order
dated 14 February 2014
allowed the appeal and
directed the deletion of the
the said amount of Rs.
56,05,862/- from being
assessed as investment.
Against the said appellate
order, the Deputy
Commissioner Of Income
Tax, Central Circle -XI,
Kolkata has filed an appeal
dated 1 May, 2014 before
the Income Tax Appellate
Tribunal, ‗B‘ Bench,
144
Kolkata Branch. At
present, the said appeal is
pending.
(2) Cases Filed Against Mr. Saurabh Mittal
Sr.
No.
Parties Forum Brief Description Amount
Involved
1. Deputy
Commissioner
Of Income Tax,
Central Circle -
XI, Kolkata
&
Saurabh Mittal
Income Tax
Appellate Tribunal,
‗B‘ Bench, Kolkata
Branch
During the course of
assessments for the
assessment years 2009-10,
2010-11 and 2011-12
respectively, the Income
Tax Department in its
assessment orders dated 25
March 2013, added the
following sums: (i) in
respect of the assessment
year 2009-10, an amount
of Rs. 1,94,99,464/- as
undisclosed income in
place of Rs. 1,94,994/-
disclosed by Mr. Saurabh
Mittal under Section
132(4) of Income Tax,
1961; (ii) in respect of the
assessment year 2010-11,
an amount of Rs.
1,37,89,000/- as
undisclosed income in
place of Rs. 1,37,890/- as
disclosed by Mr. Saurabh
Mittal under Section
132(4) of Income Tax,
1961; and (iii) in respect
of the assessment year
2011-12, an amount of Rs.
43,45,000/- as undisclosed
income in place of Rs.
43,450/- as disclosed by
Mr. Saurabh Mittal under
Section 132(4) of Income
Tax, 1961. In respect of
the said assessment orders,
Mr. Saurabh Mittal filed
appeals dated 18 April
2013 before the
Commissioner Of Income
Tax (Appeals) – C-I,
Kolkata, which in its order
dated 25 February 2014
allowed the appeals and
directed the Assessing
Rs.
3,72,57,130/-
145
Sr.
No.
Parties Forum Brief Description Amount
Involved
Officer to delete the
additions of the said
undisclosed income from
its assessments. Against
the said appellate order,
the Deputy Commissioner
Of Income Tax, Central
Circle - XI, Kolkata has
filed an appeal on 1 May
2014 before the Income
Tax Appellate Tribunal,
‗B‘ Bench, Kolkata
Branch. At present, the
said appeal is pending.
(3) Cases Filed by Himalaya Granites Limited
Sr.
No.
Parties Forum Brief Description Amount
Involved
1. Assistant
Commissioner Of
Income Tax,
Circle -5,Kolkata
and Himalaya
Granites Limited
(―Himalaya‖)
Commissioner of
Income Tax
(Appeals) -V,
Kolkata
The Assistant
Commissioner of Income
Tax, Circle-5, Kolkata
passed an assessment order
in respect of the assessment
year 2007-08 under Section
144(3) read with Section
115 WE (3) of the Income
Tax Act against Himalaya
on 31 December 2009
disallowing (i) the
depreciation in respect of
assets comprised of quarry
land and development
aggregating to Rs. 66, 13,
244/-; and (ii)
administrative expenses
relating to exempt income
under Section 14A of
Income Tax, 1961
aggregating to Rs.
8,77,196/-. Against the said
order, Himalaya has filed an
appeal dated 28 January
2010, before the
Commissioner (Appeals) -
V, Kolkata. At present, the
said appeal is pending.
Rs.
74,90,440/-
2. Deputy
Commissioner of
Income Tax,
Commissioner of
Income Tax
(Appeals) -VI,
The Deputy Commissioner
of Income Tax, Circle-5,
Kolkata passed an
Rs.
84,78,824/-
146
Sr.
No.
Parties Forum Brief Description Amount
Involved
Circle -5,Kolkata
&
Himalaya
Kolkata assessment order on 16
December 2010 under
Section 143(3) of the
Income Tax Act against
Himalaya disallowing (i) the
depreciation in respect of
assets comprised of quarry
land and development
aggregating to Rs. 68, 16,
499/-; (ii) unpaid liabilities
of bonus aggregating to Rs.
7, 03, 348/- under Section
43B of Income Tax Act; and
(iii) delayed deposit of
employees‘ contribution to
provident fund aggregating
to Rs. 7, 96,477/- Section
43B of Income Tax Act, for
the assessment year 2008-
09. Against the said order,
Himalaya has filed an
appeal on 27 January 2011,
before the Commissioner of
Income Tax (Appeals)-VI,
Kolkata. At present, the said
appeal is pending.
(4) Cases Filed against Himalaya Granites Limited
Sr.
No.
Parties Forum Brief Description Amount
Involved
1. Deputy
Commissioner Of
Income
Tax,Circle -XI,
Kolkata
&
Himalaya
Income Tax
Appellate Tribunal,
‗C‘ Bench, Kolkata
In respect of the assessment
year 2002-03, the original
assessment was completed by
the Assessing Officer on 1
September 2004, assessing
the total income of Himalaya
to be amounting to Rs.
12,57,408/-. Subsequently,
the assessing officer re-
opened the assessment
proceedings on 19 September
2007 and passed an
assessment order dated 31
December 2008 under
Section 147 read with Section
143(3) in respect of the said
reassessment, assessing the
total income for the
assessment year 2002-03 to
be amounting to Rs.
Rs.
30,24,334/-
147
Sr.
No.
Parties Forum Brief Description Amount
Involved
42,81,742/-. Against the said
reassessment order, Himalaya
filed an appeal dated 2
February 2009 before the
Commissioner of Income Tax
(Appeals), Central-III,
Kolkata, which in its order
dated 31 March 2014 allowed
the appeal and annulled the
reassessment by quashing the
reassessment order. Against
the said appellate order, the
assessing officer has filed an
appeal dated 5 June 2014
before the Income Tax
Appellate Tribunal, ‗C‘
Bench, Kolkata Branch. At
present, the said appeal is
pending.
2. Deputy
Commissioner Of
Income Tax,
Circle -XI,
Kolkata
&
Himalaya
Income Tax
Appellate Tribunal,
‗C‘ Bench, Kolkata
In respect of the assessment
year 2003-04, the original
assessment was completed by
the Assessing Officer on 7
March 2006, assessing the
total income of Himalaya to
be NIL. Subsequently, the
assessing office re-opened the
assessment proceedings and
passed an assessment order
dated 31 December 2008
under Section 263 read with
Section 143(3) of Income
Tax, 1961 in respect of the
said reassessment, assessing
the total income for the
assessment year 2003-04 to
be amounting to Rs.
39,17,810/-.
Against the said reassessment
order, Himalaya filed an
appeal dated 2 February 2009
before the Commissioner of
Income Tax (Appeals),
Central-III, Kolkata, which in
its order dated 7 April 2014
allowed the appeal and
allowed relief of an amount
of Rs. 36,30,721/- Himalaya
in the following manner: (i)
relief in respect of
depreciation of quarry land &
Rs.
Rs.36,30,72
1/-
148
Sr.
No.
Parties Forum Brief Description Amount
Involved
development, amounting to
Rs. 28,70,141/-; and (ii) relief
in respect of computation of
deduction under Section
80HHC of Income Tax, 1971,
amounting to Rs. 7,60,580/-.
Against the said appellate
order, the assessing officer
has filed an appeal dated 5
June 2014 before the Income
Tax Appellate Tribunal, ‗C‘
Bench, Kolkata Branch. At
present, the said appeal is
pending.
3. Commissioner of
Income Tax,
Kolkata-II
&
Himalaya
Calcutta High Court In respect of the assessment
year 2004-05, the Assistant
Commissioner of Income
Tax, Central Circle-II,
Kolkata passed an assessment
order dated 28 December
2006 under Section 143 of
Income Tax Act determining
the total income as Rs.
25,93,565/-, which
assessment order was set
aside by the Commissioner of
Income Tax, Central-III,
Kolkata vide its order dated
23 January 2009 on the
grounds of that in respect of
the assessment excess
deduction was allowed under
Section 80HHC amounting to
Rs. 6,07,751/- by taking into
account net interest instead of
gross interest.
Against the said order of the
Commissioner of Income
Tax, Central-III, Kolkata,
Himalaya filed an appeal
dated before the Income Tax
Appellate Tribunal, ‗C‘
Bench, Kolkata. The Income
Tax Appellate Tribunal, ‗C‘
Bench, Kolkata by its order
bearing appeal no. I.T.A No.
231/Kol/2009 dated 4
September 2009 allowed the
appeal filed by Himalaya and
quashed the order of the
Rs.
6,07,751/-
149
Sr.
No.
Parties Forum Brief Description Amount
Involved
Commissioner of Income
Tax, Central-III, Kolkata.
Against the said order, the
Commissioner of Income
Tax, Central-III, Kolkata has
filed an appeal bearing
Income Tax Appeal No. 31 of
2010 before the Calcutta
High Court.
4. Deputy
Commissioner of
Income
Tax,Circle -XI,
Kolkata
&
Himalaya
Income Tax
Appellate Tribunal,
‗C‘ Bench, Kolkata
In respect of the assessment
year 2005-06, the original
assessment was completed by
the Assessing Officer on 31
December 2007, assessing
the total income of Himalaya
to be amounting to Rs.
85,22,450/-. Against the said
assessment order, Himalaya
filed an appeal dated 21
January 2008 before the
Commissioner of Income Tax
(Appeals), Central-III,
Kolkata, which in its order
under Section 250(6) dated 7
April 2014 allowed the
appeal granting relief to
Himalaya to an extent of Rs.
23,92,882/- in the following
manner: (i) relief in respect of
depreciation of quarry land &
development, amounting to
Rs. 23,45,752/-; and (ii) relief
in respect of computation of
deduction under Section 14A
of Income Tax, 1961,
amounting to Rs. 47,130/-.
Against the said appellate
order, the assessing officer
has filed an appeal dated 5
June 2014 before the Income
Tax Appellate Tribunal, ‗C‘
Bench, Kolkata Branch. At
present, the said appeal is
pending.
Rs.
23,92,882/-
5. Deputy
Commissioner Of
Income
Tax,Circle -XI,
Kolkata
Income Tax
Appellate Tribunal,
‗C‘ Bench, Kolkata
In respect of the assessment
year 2006-07, the original
assessment was completed by
the Assessing Officer on 31
December 2008, assessing
Rs.
21,24,489/-
150
Sr.
No.
Parties Forum Brief Description Amount
Involved
&
Himalaya
the total income of Himalaya
to be amounting to Rs.
1,18,91,480/-. Against the
said assessment order,
Himalaya filed an appeal
dated 2 February 2009 before
the Commissioner of Income
Tax (Appeals), Central-III,
Kolkata, which in its order
under Section 250(6) dated 7
April 2014 allowed the
appeal granting relief to
Himalaya to an extent of Rs.
21,24,489/- in respect of
assets comprised in quarry
land and development
amounting.
Against the said appellate
order, the assessing officer
has filed an appeal dated 5
June 2014 before the Income
Tax Appellate Tribunal, ‗C‘
Bench, Kolkata Branch. At
present, the said appeal is
pending.
151
XXII. GOVERNMENT APPROVALS
On transfer of the Demerged Undertaking of Greenply to our Company under the Scheme, all
permits, rights, entitlements, bids, tenders, registration and other licences, letters of intent,
expressions of interest, development rights (whether vested or potential and whether under
agreements or otherwise), patent, trademarks, copyrights, records, designs, and all relevant
intellectual property rights in the aforesaid, municipal permissions, approvals, consents,
subsidies, tenancies in relation to the offices, and/or residential properties for the employees,
privileges, income tax benefits and exemptions under the Income Tax Act (or any statutory
modification or reenactment thereof for the time being in force), all other rights including
sales tax deferrals and exemptions and other benefits, lease rights and the rights in relation
thereto, receivables, and liabilities related thereto, licences, powers and facilities of every
kind, nature and description whatsoever, rights to use and avail of telephones, telexes,
facsimile connections and installations, utilities, electricity and other services, provisions and
benefits of all agreements, contracts and arrangements and all other interests in connection
with or relating to the Demerged Undertaking stand transferred to and vested in or be deemed
to be transferred to and vested in our Company as if the same were originally given or issued
to or executed in favour of our Company, and the rights and benefits under the same shall be
available to our Company.
Our Company was incorporated under the Companies Act and has the following registrations:
CIN: U21016AS2013PLC011624
PAN: AAFCG2966D
TAN: DELG16365G
152
SECTION VII - REGULATORY AND STATUTORY DISCLOSURES
XXIII. REGULATORY AND OTHER DISCLOSURES
(a) Authority for the Scheme
The Hon‘ble Gauhati High Court, vide its Order dated 31 October 2014 has sanctioned the
Composite Scheme of Arrangement.
(b) Prohibition by SEBI
Our Company, Promoter and Promoter Group, Directors and Group Companies and natural
persons behind our companies with which the directors of our Company are associated, as
directors or promoters, have not been prohibited from accessing the capital market under any
order or directions passed by SEBI.
(c) Caution
Our Company accepts no responsibility for statement made otherwise than in the Information
Memorandum or in the advertisements to be published in terms of SEBI Circulars or any
other material issued by or at the instance of our Company and anyone placing reliance on
any other source of information would be doing so at his or her own risk. All information
shall be made available by our Company to the public and investors at large and no selective
or additional information would be available for a section of the investors in any manner.
(d) Disclaimer-NSE
As required, a copy of this Information Memorandum has been submitted to NSE. NSE has
by its letter dated 25 March 2014 has given its ‗no-objection‘ to the Composite Scheme of
Arrangement under clause 24(f) of the Listing Agreement and by virtue of that approval,
NSE‘s name has been inserted in this Information Memorandum as one of the stock
exchanges on which the Equity Shares are proposed to be listed.
NSE does not in any manner:
warrant, certify or endorse the correctness or completeness of any of the contents of this
Information Memorandum; or
warrant that the Company‘s securities will be listed or will continue to be listed on NSE;
or
take any responsibility for the financial or other soundness of the Company.
It should not for any reason be deemed or construed to mean that this Information
Memorandum has been cleared or approved by NSE.
Every person who desires to apply for or otherwise acquires any securities of the Company
may do so pursuant to an independent inquiry, investigation and analysis and shall not have
any claim against NSE whatsoever by reason of any loss, which may be suffered by such
person consequent to or in connection with such subscription/acquisition whether by reason
of anything stated or omitted to be stated herein or for any other reason whatsoever
(e) Disclaimer-BSE
As required, a copy of this Information Memorandum has been submitted to BSE. BSE has by
its letter dated 25 March 2014 has given its ‗no-objection‘ to the Composite Scheme of
153
Arrangement under clause 24(f) of the Listing Agreement and by virtue of that approval,
BSE‘s name has been inserted in this Information Memorandum as one of the stock
exchanges on which the Equity Shares are proposed to be listed.
BSE does not in any manner:
warrant, certify or endorse the correctness or completeness of any of the contents of
this Information Memorandum; or
warrant that the Company‘s securities will be listed or will continue to be listed on
BSE; or
take any responsibility for the financial or other soundness of the Company.
It should not for any reason be deemed or construed to mean that this Information
Memorandum has been cleared or approved by BSE.
Every person who desires to apply for or otherwise acquires any securities of the Company
may do so pursuant to an independent inquiry, investigation and analysis and shall not have
any claim against BSE whatsoever by reason of any loss, which may be suffered by such
person consequent to or in connection with such subscription/acquisition whether by reason
of anything stated or omitted to be stated herein or for any other reason whatsoever.
(f) Filing
This Information Memorandum has been filed with BSE and NSE.
(g) Listing
Applications will be made to BSE and NSE for permission to deal in and for an official
quotation of the Equity Shares of our Company. Our Company has nominated NSE as the
Designated Stock Exchange for the aforesaid listing of the shares. The Company has taken
steps for completion of necessary formalities for listing and commencement of trading at all
the Stock Exchanges mentioned above.
(h) Identification as willful defaulter by RBI
Our Company, Promoter, Group Companies, the relatives (as per Companies Act) of
Promoter, Group Companies have not been identified as wilful defaulters by Reserve Bank of
India or other authorities.
(i) Demat Credit
Our Company has executed tripartite agreement dated 18 November 2014 with the Registrar
& Share Transfer Agent and NSDL and tripartite agreement dated 5 November 2014 with
Registrar & Share Transfer Agent and CDSL for admitting its securities in demat form.
(j) Expert Opinions
Save as stated elsewhere in this Information Memorandum, the Company has not obtained
any expert opinions.
(k) Promise vis-à -vis performance
Our Company has not made any prior public or rights issue of securities.
154
(l) Previous Rights and Public Issues
The Company has never made any public issue, rights issue of equity shares since
incorporation.
(m) Commission and brokerage on previous issues
Since the Company has not issued shares to the public in the past, no sum has been paid or
has been payable as commission or brokerage for subscribing to or procuring or agreeing to
procure subscription for any of the Equity Shares since its inception.
(n) Outstanding debentures or bonds and redeemable preference shares and other
instruments issued by the Company
There are no outstanding debentures or bonds and redeemable preference shares and other
instruments issued by the Company.
(o) Stock Market Data for Equity Shares
The Equity Shares are not listed on any stock exchange. The Company is seeking approval
from the Stock Exchanges for listing of its Equity Shares through this Information
Memorandum.
(p) Allotment of shares pursuant to the Scheme
Our Company has issued and allotted Equity Shares on 29 November 2014 to eligible
shareholders pursuant to the Scheme. The allotment advice and share certificates, where
applicable, were dispatched to the shareholders.
(q) Mechanism for redressal of investor grievance of Promoter and Group Companies
Himalaya Granites Limited
Himalaya Granites Limited has Stakeholders‘ Relationship committee which meets as and
when required, to deal with matters relating to transfer/transmission of shares, issue of
duplicate share certificates, dematerialization/rematerialisation of shares and monitors
redressal of complaints from shareholders relating to transfers, non-receipt of Annual Reports,
non-receipt of dividend declared, etc.
Investor grievances are generally resolved within an average period of 15 days from the date
of its receipt.
Himalaya Granites Limited doesn‘t have any outstanding complaints from the Investors as on
31 March 2014.
Status of outstanding complaints from the Investor(s) of Himalaya Granites Limited for the
period from 1 April 2014 till 30 September 2014 is as under:
Complaints received: Nil
Redressed/ Resolved: Nil
Pending: Nil
Disposal of Investor Grievance of our Company
155
Link Intime (India) Limited are the Registrar and Share Transfer Agents of our Company. All
investor grievances would be redressed within an average period of 15 days from the date of
its receipt by our Company or its Share Transfer Agent. Investors can contact our Company‘s
Share Transfer Agent or the Compliance Officer or the Secretarial Department of our
Company in case of any share transfer related problem. The addresses and contact numbers
are given elsewhere in this Information Memorandum. For quicker response, investors are
requested to mention their contact numbers and email addresses while communicating their
grievances.
Our Company has appointed Mr. Prakash Kumar Biswal, as the Company Secretary and
Compliance Officer of our Company and he may be contacted in case of any queries at the
following address:
Address: M/s. Greenlam Industries Limited,
1501-1505, Narain Manzil,
23, Barakhamba Road, New Delhi – 110001
Phone: 011-42791399
Fax: 011-42791330
Email: [email protected]
Registrar and Share Transfer Agent: Link Intime India Pvt. Ltd,
Address: 44, Community Centre, Phase-I,
Near PVR, Naraina Ind. Area, New Delhi-110028,
Phone: +91 11 4141 0592,
Fax: +91 11 4141 0591,
Email: [email protected]
156
XXIV. ARTICLES OF ASSOCIATION
THE COMPANIES ACT, 2013
COMPANY LIMITED BY SHARES
(Incorporated under the Companies Act, 1956)
ARTICLES OF ASSOCIATION
OF
GREENLAM INDUSTRIES LIMITED
The following regulations comprised in these Articles of Associations were adopted pursuant to
members’ resolution passed at the annual general meeting of the Company held on 30th October,
2014 in substitution for, and to the entire exclusion of, the earlier regulations comprised in the extant
Articles of Associations of the Company except for Article 127 which has been re-numbered as Article
174.
The regulations contained in table ―F‖ of the first Schedule to the Companies Act, 2013 shall not
apply to the Company, except in so far as they are embodied in the following Articles, which shall be
the regulations for the management of the Company.
SHARE CAPITAL, INCREASE AND REDUCTION OF CAPITAL
Amount of Capital
3. The authorized share capital of the Company shall be the Capital as specified in Clause V of
the memorandum of association, with power to increase and reduce the Capital of the
Company and to divide the Shares in the Capital for the time being into several classes as
permissible in Applicable Law and to attach thereto respectively such preferential, deferred,
qualified or special rights, privileges or conditions as may be determined by the Board, and to
vary, modify, amalgamate or abrogate any such rights, privileges or conditions.
Increase of Capital by the Company and how carried in to effect
4. Subject to Applicable Law, the Board may, from time to time, increase the Capital by the
creation of new Shares. Such increase shall be of such aggregate amount and to be divided
into such Shares of such respective amounts, as the resolution of the Board shall prescribe.
Subject to the provisions of the Act, any Shares of the original or increased Capital shall be
issued upon such terms and conditions and with such rights and privileges annexed thereto, as
the Board shall determine, and in particular, such shares may be issued with a preferential or
qualified right to dividends, or otherwise, or with a right to participate in some profits or
assets of the Company, or with such differential or qualified right of voting at General
Meetings of the Company, as permitted in terms of Section 47 of the Act or other Applicable
Law. Whenever the Capital of the Company has been increased under the provisions of this
Article, the Directors shall comply with the provisions of Section 64 of the Act or any such
compliance as may be required by the Act for the time being in force.
New Capital part of the existing Capital
5. Except in so far as otherwise provided in the conditions of issue of Shares, any Capital raised
by the creation of new Shares shall be considered as part of the existing Capital, and shall be
subject to provisions herein contained, with reference to the payment of calls and
installments, forfeiture, lien, surrender, transfer and transmission, voting and otherwise.
157
Issue of redeemable preference shares
6. Subject to the provisions of Section 55 of the Act and other Applicable Law, preference shares
may be issued from time to time, on the terms as may be decided at the time of the issue.
Further,
6.1 Such preference shares shall always rank in priority with respect to payment of Dividend
or repayment of Capital vis-à-vis equity shares;
6.2 The Board may decide on the participation of preference shareholders in the surplus
Dividend, type of preference shares issued whether cumulative or otherwise, conversion
terms into equity if any;
6.3 The Board may decide on any premium on the issue or redemption of preference shares.
7. Provisions applicable to other Securities: The Board shall be entitled to issue, from time to
time, subject to Applicable Law, any other Securities, including Securities convertible into
Shares, exchangeable into Shares, or carrying a warrant, with or without any attached
Securities, carrying such terms as to coupon, returns, repayment, servicing, as may be decided
by the terms of such issue. Such Securities may be issued at premium or discount, and
redeemed at premium or discount, as may be determined by the terms of the issuance:
Provided that the Company shall not issue any Shares or Securities convertible into Shares at
a discount.
Reduction of Capital
8. The Company may (subject to the provisions of Sections 52, 55, 66, of the Act or any other
applicable provisions of law for the time being in force) from time to time by way of Special
Resolution reduce its Capital, any capital redemption reserve account or share premium
account in any manner for the time being authorized by law.
Sub-division, consolidation and cancellation of Shares
9. Subject to the provisions of Section 61 of the Act, the Company in General Meeting may from
time to time (a) consolidate its Shares into shares of a larger amount than the existing Shares, or
any class of them, and (b) sub-divide its existing Shares or any of them into Shares of smaller
amount than is fixed by the memorandum of association and the resolution whereby any Share
is sub-divided, or classified, may determine that, as between the holders of the Shares resulting
from such sub-division or classification, one or more of such Shares shall have some preference
or special advantage as regards Dividend, Capital or otherwise over or as compared with the
other.
Provided however, that in the subdivision the proportion between the amount paid and the
amount, if any, unpaid on each reduced Share shall be the same as it was in the case of the
Share from which the reduced share is derived.
Subject as aforesaid, the Company in General Meeting may also cancel Shares which have not
been taken or agreed to be taken by any person and diminish the amount of its Share Capital by
the amount of the Shares so cancelled.
Modification of rights
10. Whenever the Capital is divided into different types or classes of Shares, all or any of the
rights and privileges attached to each type or class may, subject to the provisions of Sections
158
48 of the Act, be varied with the consent in writing by holders of at least three-fourths of the
issued Shares of the class or is confirmed by a Special Resolution passed at a separate
Meeting of the holders of Shares of that class and all the provisions hereinafter contained as
to General Meetings shall mutatis mutandis apply to every such class Meeting, but so that the
quorum thereof shall be any two members present in person. This Article is not to derogate
any power the Company would have if the clause were omitted.
Further issue of Capital
11. Where at any time it is proposed to increase the subscribed Capital of the Company by
allotment of further Shares, then:
11.1 Such further Shares shall be offered to the persons who on the date of the offer, are
holders of the equity shares of the Company, in proportion as nearly as circumstances
admit, to the Capital paid-up on those shares at the date.
11.2 Such offer shall be made by a notice specifying the number of shares offered and
limiting the time as per the applicable provisions of the Act and subject to the
Applicable Law from time to time and the offer if not accepted within that time limit,
will be deemed to have been declined.
11.3 The offer aforesaid shall be deemed to include a right exercisable by the person
concerned to renounce the shares offered to him or any of them in favour of any other
person and the notice referred above shall contain a statement of this right.
11.4 After the expiry of the time specified in the aforesaid notice or on receipt of earlier
intimation from the person to whom such notice is given that he declines to accept the
shares offered, the Board of Directors may dispose of them in such manner as they
think most beneficial to the interest of the Company.
12. Notwithstanding anything contained in the Article no. 0 the further Shares aforesaid may be
offered in any manner whatsoever, to:
12.1 employees under a scheme of employees‘ stock option scheme
12.2 to any persons on private placement or on preferential basis, whether or not those
persons include the persons referred to Article no. 0, either for cash or for a
consideration other than cash, if so decided by a Special Resolution, as per Applicable
Law.
13. Nothing in Article no. 12.2 hereof shall be deemed;
13.1 To extend the time within which the offer should be accepted; or
13.2 To authorise any person to exercise the right of renunciation for a second time, on the
ground that the person in whose favour the renunciation was first made has declined
to take the shares comprised in the renunciation.
14. Nothing in this Article shall apply to the increase of the subscribed Capital of the Company:
14.1 caused by the exercise of an option attached to the Debenture issued by the Company
to convert such Debentures or loans into shares in the Company;
14.2 Provided that the terms of issue of such Debentures or the terms of such loans
containing such an option have been approved before the issue of such Debentures or
159
the raising of loan by a Special Resolution passed by the Company in General
Meeting.
Shares at the disposal of the Directors
15. Subject to the provisions above, and of Section 62 of the Act, the Shares and Securities of the
Company for the time being shall be under the control of the Directors who may issue, allot or
otherwise dispose of the same or any of them to such person, in such proportion and on such
terms and conditions and either at a premium or at par and at such time as they may from time
to time think fit and to give to any person or persons the option or right to call for any Shares
either at par or premium during such time and for such consideration as the Directors think fit,
and may issue and allot Shares in the Capital of the Company or other Securities on payment in
full or part of any property sold and transferred or for any services rendered to the Company in
the conduct of its business and any Shares which may so be allotted may be issued as fully paid
up shares and if so issued, shall be deemed to be fully paid shares. Provided that option or right
to call of Shares shall not be given to any person or persons without the sanction of the
Company in the General Meeting.
16. If the Company shall offer any of its Shares to the public for subscription the amount payable
on application on each Share shall not be less than such amount as may be prescribed under
Applicable Law.
Power to issue Shares outside India
17. Pursuant to the provisions of Section 62 and other applicable provisions, if any, of the Act,
and subject to such approvals, permissions and sanctions as may be necessary from the
Government of India, Reserve Bank of India and/or any other authorities or institutions as
may be relevant (hereinafter collectively referred to as ―Appropriate Authorities‖) and subject
to such terms and conditions or such modifications thereto as may be prescribed by them in
granting such approvals, permissions and sanctions, the Company will be entitled to issue and
allot in the international capital markets, equity Shares and/or any instruments or Securities
(including Global Depository Receipts) representing equity Shares, any such instruments or
securities being either with or without detachable warrants attached thereto entitling the
warrant holder to Equity Shares/instruments or securities (including Global Depository
Receipts) representing equity Shares, (hereinafter collectively referred to as ―the Securities‖,
for the purpose of this Article) to be subscribed to in foreign currency / currencies by foreign
investors(whether individuals and/or bodies corporate and/or institutions and whether
shareholders of the Company or not) for an amount, inclusive of such premium as may be
determined by the Board. Such issue and allotment to be made on such occasion or occasions,
at such value or values, or at a premium and in such form and in manner and on such terms
and conditions or such modifications thereto as the Board may determine in consultation with
lead manager and/or underwriters and/or legal or other advisors, or as may be prescribed by
the Appropriate Authorities while granting their approvals, permissions and sanctions as
aforesaid which the Board be and is hereby authorized to accept at its sole discretion. The
provisions of this Article shall extend to allow the Board to issue such foreign Securities, in
such manner as may be permitted by Applicable Law.
Acceptance of Shares
18. Any application signed by or on behalf of an applicant, for Shares in the Company, followed
by an allotment of any Share shall be an acceptance of shares within the meaning of these
Articles and every person who, does or otherwise accepts Shares and whose name is on the
Register of Members shall for the purpose of these Articles, be a Member.
Restriction on purchase or in giving loans by Company for purchase of its own Securities
160
19. Except as provided in these Articles, none of the funds of the Company shall be employed in
giving, directly or indirectly, any financial assistance for the purpose of any purchase or
subscription of Securities of the Company, except as permitted by Section 70 of the Act.
Private placement
20. The Board may, from time to time, offer any Securities on private placement basis, to such
persons as the Board may determine, provided that such private placement shall comply with
Applicable Law.
Call to be a debt payable immediately
21. The money (if any) which the Board shall, on the allotment of any Security being made by
them require or direct to be paid by way of call or otherwise in respect of any Security
allotted by them shall immediately on the insertion of the name of the allottee in the Register
of Members as the name of the holder of such Securities, become a debt due to and
recoverable by the Company from the allottee thereof, and shall be paid by him accordingly.
Liability of Members
22. Every member, or his heirs, executors or administrators shall pay to the Company the portion
of the Capital represented by his Share(s) which may, for the time being, remain unpaid
thereon, in such amounts, at such time or times, and in such manner as the Board shall, from
time to time in accordance with the Company‘s regulations, require or fix for the payment
thereof.
Register of Members and index
25. The Company shall maintain a Register of Members and index in accordance with Section 88
of the Act. The details of shares held in physical or dematerialized forms may be maintained in
a media as may be permitted by law including in any form of electronic media.
26. A member, or other Security holder or Beneficial Owner may make inspection of Register of
Members and annual return. Any person other than the Member or Debenture holder or
Beneficial Owner of the Company shall be allowed to make inspection of the Register of
Members and annual return on payment of Rs. 50 or such higher amount as permitted by
Applicable Law as the Board may determine, for each inspection. Inspection may be made
during business hours of the Company during such time, not being less than 2 hours on any
day, as may be fixed by the company secretary from time to time.
27. Such person, as referred to in Article no. 0 above, may be allowed to make copies of the
Register of Members or any other register maintained by the Company and annual return, and
require a copy of any specific extract therein, on payment of Rs. 10 for each page, or such
higher amount as permitted under Applicable Law.
SHARES CERTIFICATES
Share certificate to be numbered progressively
29. The shares certificates shall be numbered progressively according to their several
denominations specify the shares to which it relates and bear the Seal of the Company. Every
forfeited or surrendered share certificate shall continue to bear the number by which the same
was originally distinguished.
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Provided however that, the provision relating to progressive or distinctive numbering of shares
shall not apply to the shares of the Company which are dematerialized or may be
dematerialized in future or issued in future in dematerialized form.
Limitation of time for issue of certificates
30. Every Member, other than a Beneficial Owner, shall be entitled, without payment, to one or
more certificates in marketable lots, for all the Shares of each class or denomination
registered in his name, or if the Directors so approve (upon paying such fee as the Directors
may from time to time determine) to several certificates each for one or more of such Shares
and the Company shall complete and have ready for delivery of such certificates, within such
time permissible under Applicable Law, from the receipt of application of registration of
transfer, transmission, sub-division, consolidation or renewal of any of its Shares as the case
may be. Every certificate(s) of Shares shall be under the Seal of the Company and shall
specify the number and distinctive numbers of Shares in respect of which it is issued and the
amount paid-up thereon, provided that in respect of Share(s) held jointly by several persons,
the Company shall not be bound to issue more than one certificate and delivery of such
certificate of Share(s) to the person first named in the register shall be a sufficient delivery to
all such holders.
Issue of new certificate in place of one defaced, lost or destroyed
31. If any certificate be worn out, defaced, mutilated, old/ or torn or if there be no further space on
the back thereof for endorsement of transfer or in case of sub-division or consolidation then
upon production and surrender such certificate to the Company, a new certificate may be issued
in lieu thereof, and if any certificate is lost or destroyed then upon proof thereof to the
satisfaction of the Company and on execution of such indemnity and the payment of out-of-
pocket expenses incurred by the Company in investigating the evidence produced as the Board
deems adequate, being given, a new certificate in lieu thereof shall be given to the party entitled
to such lost or destroyed certificate. Every certificate under the Article shall be issued in case of
splitting or consolidation of Share certificate(s) or in replacement of Share certificate(s) that are
defaced, mutilated, torn or old, decrepit or worn out without payment of fees if the Directors so
decide, or on payment of such fees (not exceeding Rs.50 for each certificate) as the Directors
shall prescribe.
Further, no duplicate certificate shall be issued in lieu of those that are lost or destroyed,
without the prior consent of the Board or any Committee authorized by the Board in this regard
and only on furnishing of such supporting evidence and/or indemnity as the Board or such
Committee may require, and the payment of out-of-pocket expenses incurred by the Company
in investigating the evidence produced, without payment of fees if the Directors so decide, or
on payment of such fees (not exceeding Rs.50 for each certificate) as the Directors shall
prescribe.
Provided further that all instruments of transfer which shall be registered shall be retained by
the Company but any instrument of transfer which the Director may decline to register shall be
returned to the person depositing the same.
Provided that notwithstanding what is stated above the Directors shall comply with such rules
or regulation or requirements of any stock exchange or the rules made under the Act or rules
made under Securities Contracts (Regulation) Act, 1956, as amended or any other Act, or rules
applicable thereof in this behalf; Provided further that the Company shall comply with the
provisions of Section 46 of the Act and other Applicable Law, in respect of issue of duplicate
shares.
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32. The provision of this Article shall mutatis mutandis apply to issue of certificates of Debentures
of the Company.
BUY BACK OF SECURITIES BY THE COMPANY
33. Notwithstanding anything contained in these Articles but subject to the provisions of Sections 68,
69 and 70 of the Act and Applicable Law as prescribed by Securities and Exchange Board of India
(SEBI) or any other authority for the time being in force, the Company may purchase its own
shares or other specified securities. The power conferred herein may be exercised by the Board, at
any time and from time to time, and to the extent permitted by Applicable Law, and shall be subject
to such rules, applicable consent or approval as required.
UNDERWRITING AND BROKERAGE
Commission may be paid
34. Subject to the provisions of Section 40(6) of the Act and Applicable Law made thereunder,
and subject to the applicable SEBI guidelines and subject to the terms of issue of the shares or
Debentures or any securities, as defined in the Securities Contract (Regulations) Act, 1956 the
Company may at any time pay a commission out of proceeds of the issue or profit or both to
any person in consideration of his subscribing or agreeing to subscribe (whether absolutely on
conditionally) for any Shares in or Debentures of the Company, or underwriting or procuring
or agreeing to procure subscriptions (whether absolute or conditional) for Shares, Debentures
or of the Company but so that the commission shall not exceed in the case of shares, five per
cent of the price at which the shares are issued, and in the case of Debentures, two and a half
per cent of the price at which the Debentures are issued or at such rates as may be fixed by the
Board within the overall limit prescribed under the Act or Securities and Exchange Board of
India Act, 1992. Such commission may be satisfied by payment in cash or by allotment of
fully or partly paid shares, securities or Debentures or partly in one way and partly in the
other.
Brokerage
The Company may, subject to Applicable Law, pay a reasonable and lawful sum for brokerage
to any person for subscribing or procuring subscription for any Securities.
CALL ON SHARES
Directors may make calls
35. The Board of Directors may, from time to time and subject to the terms on which Shares have
been issued and subject to the conditions of allotment, by a resolution passed at a meeting of
the Board, or otherwise as permitted by Applicable Law make such call as it thinks fit upon
the members in respect of all moneys unpaid on the Shares held by them respectively, and
each member shall pay the amount of every call so made on him in the manner and at the
times and places appointed by the Board of Directors. A call may be made payable by
installment.
Uniform conditions as to Calls, etc.
36. Where any calls for further share Capital are made on Shares, such calls shall be made on a
uniform basis on all Shares falling under the same class.
Notice of calls
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37. Each Member shall, subject to receiving at least fourteen days‘ notice specifying the time or
such other time as may be permitted by Applicable Law or times and place of payment, pay to
the Company, at the time or times and place so specified, the amount called on his shares.
38. A call may be revoked or postponed at the discretion of the Board.
Calls to date from resolution
39. A call shall be deemed to have been made at the time when the resolution authorizing such
call was passed as provided herein and may be required to be paid by installments. Every such
installment shall, when due, be paid to the Company by the person who for the time being
shall be the registered holder of the Share or by his legal representative.
Calls to carry interest
41. If any Member fails to pay any call due from him on the day appointed for payment thereof,
or any such extension thereof as aforesaid, he shall be liable to pay interest on the same from
the last day appointed for the payment thereof to the time of actual payment at such rate as the
Board of Directors may determine. Nothing in this Article shall render it obligatory for the
Board of Directors to demand or recover any interest from any such Member.
42. The Board shall be at liberty to waive payment of any such interest wholly or in part.
Sums deemed to be calls
43. Any sum, which may by the terms of issue of a Share becomes payable on allotment or at any
fixed date, whether on account of the nominal value of the Share or by way of premium, shall
for the purposes of these Articles be deemed to be a call duly made and payable, on the date
on which by the terms of issue the same becomes payable and in case of non-payment, all the
relevant provisions of these Articles as to payment of interest and expenses, forfeiture or
otherwise, shall apply as if such sum had become payable by virtue of a call duly made and
notified.
Proof on trial of suit for money due on Shares
44. At the trial or hearing of any action or suit brought by the Company against any Member or
his representatives for the recovery of any money claimed to be due to the Company in
respect of his shares, it shall be sufficient to prove that the name of the member, in respect of
whose shares, the money is sought to be recovered appears entered on the Register of
Members as the holder, at or subsequently to the date at which the money is sought to be
recovered, is alleged to have become due on the shares in respect of such money is sought to
be recovered, that the resolution making the call is duly recorded in the minute book, and that
notice of such call was duly given to the member or his representatives in pursuance of these
Articles and that it shall not be necessary to prove the appointment of the Directors who made
such call, nor that a quorum of Directors was present at the Board at which any call was made
nor that the meeting at which any call was made duly convened or constituted nor any other
matters whatsoever, but the proof of the matter aforesaid shall be conclusive evidence of the
debt.
Partial payment not to preclude forfeiture
45. Neither the receipt by the Company of a portion of any money which shall from time to time
be due from any member to the Company in respect of his shares, either by way of principal
or interest, nor any indulgence granted by the Company in respect of the payment of any such
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money, shall preclude the Company from thereafter proceeding to enforce a forfeiture of such
shares as hereinafter provided.
Payment in anticipation of call may carry interest
46. The Directors may, if they think fit, subject to the provisions of Section 50 of the Act, agree to
and receive from any Member willing to advance the whole or any part of the moneys due upon
the shares held by him beyond the sums actually called for, and upon the amount so paid or
satisfied in advance, or so much thereof as from time to time exceeds the amount of the calls
then made upon the shares in respect of which such advance has been made, the Company may
pay interest at such rate, as the Member paying such sum in advance and the Directors agree
upon provided that money paid in advance of calls shall not confer a right to participate in
profits or Dividend. The Directors may at any time repay the amount so advanced. The
Members shall not be entitled to any voting rights in respect of the moneys so paid by him until
the same would but for such payment, become presently payable.
47. The provisions of these Articles shall mutatis mutandis apply to the calls on Debenture or other
Securities of the Company.
FORFEITURE OF SHARE
If call or installment not paid notice may be given
55. If any Member fails to pay any call or installment on or before the day appointed for the
payment of the same the Board may at any time thereafter during such time as the call or
installment remains unpaid, serve notice on such Member requiring him to pay the same,
together with any interest that may have accrued and all expenses that may have been
incurred by the Company by reason of such non-payment.
Form of notice
56. The notice shall:
56.1 name a further day (not being earlier than the expiry of fourteen days from the date of
service of the notice) on or before which the payment required by the notice is to be
made.
56.2 detail the amount which is due and payable on the shares and shall state that in the
event of non-payment on or before the time appointed the shares will be liable to be
forfeited.
If notice not complied with Shares may be forfeited
57. If the requisitions of any such notice as aforesaid be not complied with, any Shares in respect
of which such notice has been given may, at any time thereafter, before payment of all calls or
installments, interest and expenses, due in respect thereof, be forfeited by a resolution of the
Board to that effect. Such forfeiture shall include all dividends declared in respect of the
forfeited Shares and not actually paid before the forfeiture. Neither the receipt by the
Company of a portion of any money which shall from time to time be due from any member
of the Company in respect of his Shares either by way of principal or interest, nor any
indulgence granted by the Company in respect of the payment of any such money shall
preclude the Company from thereafter proceeding to enforce a forfeiture of such Shares as
herein provided.
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Notice of forfeiture to a Member
58. When any Shares shall have been so forfeited, notice of the forfeiture shall be given to the
member in whose name it stood immediately prior to the forfeiture, and an entry of the
forfeiture, with the date thereof, shall forthwith be made in the Register of Members, but no
forfeiture shall be in any manner invalidated, by any omission or neglect to give such notice
or to make any such entry as aforesaid.
Forfeited Share to become property of the Company
59. Any Share so forfeited shall be deemed to be the property of the Company, and the Board
may sell, re allot or otherwise dispose of the same in such manner as think fit.
Power to cancel forfeiture
60. The Board may, at any time before any Share so forfeited shall have been sold, re-allotted or
otherwise disposed of, cancel the forfeiture thereof upon such conditions as it thinks fit.
Liability on forfeiture
61. A person whose Share has been forfeited shall cease to be a Member in respect of the
forfeited Share, but shall notwithstanding, remain liable to pay, and shall forthwith pay to the
Company, all calls, or installment, interest and expenses, owing in respect of such Share at the
time of the forfeiture, together with interest thereon, from the time of forfeiture until payment,
at such rate as the Board may determine and the Board may enforce the payment thereof, to
any party thereof, without any deduction or allowance for the value of the shares at the time
of forfeiture, but shall not be under any obligation to do so. The liability of such person shall
cease if and when the Company shall have received payment in full of all such monies in
respect of the Shares.
62. The liability of such person shall cease if and when the Company shall have received payment
in full of all such money in respect of the shares.
Effect of forfeiture
63. The forfeiture of a Share involves extinction, at the time of the forfeiture, of all interest and
all claims and demands against the Company in respect of the Share and all other rights,
incidental to the Share except only such of those rights as by these Articles are expressly
saved.
Evidence of forfeiture
64. A duly verified declaration in writing that the declarant is a Director, the manager or the
secretary of the Company, and that certain Shares in the Company have been duly forfeited
on a date stated in the declaration shall be conclusive evidence of the facts therein stated as
against all persons claiming to be entitled to the Shares and such declaration, and the receipt
by the Company for the consideration, if any, given for the Shares on the sale or disposition
thereof, shall constitute, a good title to such Shares and the person to whom the Shares are
sold shall be registered as the holder of such Shares and shall not be bound to see to the
application of the purchase money, nor shall his title to such shares be affected by any
irregularity or invalidity in the proceedings in reference to such forfeiture, sale of disposition.
Cancellation of Share certificate in respect of forfeited Shares
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65. Upon any sale, re-allotment or other disposal under the provisions of the preceding Articles,
the certificate or certificates originally issued in respect of the relevant Shares shall (unless
the same shall on demand by the Company have been previously surrendered to it by the
defaulting member) stand cancelled and become null and void and of no effect, and the
Directors, shall be entitled to issue a duplicate certificate or certificates in respect of the said
shares to the person or persons, entitled thereto as per the provisions herein.
65.1 The Company may receive the consideration, if any, given for the Share on any sale
or disposal thereof and may execute a transfer of the Share in favour of the person to
whom the Share is sold or disposed off.
65.2 The transferee shall thereupon be registered as the holder of the Share; and
65.2.1 The transferee shall not be bound to see to the application of the purchase money, if
any, nor shall his title to the Share be affected by any irregularity or invalidity in the
proceedings in reference to the forfeiture, sale or disposal of the Share.
These Articles to apply in case of any non-payment
The provisions of these regulations as to forfeiture shall apply in the case of non-payment of any sum
which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the
nominal value of the Share or by way of premium, as if the same had been payable by virtue of a call
duly made and notified.
Employees Stock Options
66. Subject to the provisions of Section 62 of the Act and the Applicable Law, the Company may
issue options to any Directors officers, or employees of the Company, its subsidiaries or its
parent, which would give such Directors, officers or employees, the benefit or right to
purchase or subscribe at a future date, the securities offered by the Company at a
predetermined price, in terms of schemes of employee stock options or employees Share
purchase or both.
Power to issue Sweat Equity Shares
67. Subject to and in compliance with Section 54 and other Applicable Law, the Company may
issue the equity shares to its employees or Director(s) at a discount or for consideration other
than cash for providing know-how or making available rights in the nature of intellectual
property rights or value additions, by whatever name called.
Preferential Allotment
68. Subject to the provisions of Section 62 the Act, read with the conditions as laid down in the
Applicable Law, and if authorized by a Special Resolution passed in a General Meeting, the
Company may issue Shares, in any manner whatsoever, by way of a preferential offer or
private placement. Such issue on preferential basis or private placement should also comply
with the conditions as laid down in Section 42 of the Act and/or Applicable law.
TRANSFER AND TRANSMISSION OF SHARES
Register of transfers
72. The Company shall keep a book to be called the ―Register of Transfers‖, and therein shall be
fairly and directly entered particulars of every transfer or transmission of any Share. The
Register of Transfers shall not be available for inspection or making of extracts by the
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Members of the Company or any other Persons. Entries in the register should be authenticated
by the secretary of the Company or by any other person authorized by the Board for the
purpose, by appending his signature to each entry.
Instruments of transfer
73. The instrument of transfer shall be in common form and in writing and all provision of
Section 56 of the Act and statutory modification thereof for the time being shall be duly
complied with in respect of all transfer of Shares and registration thereof.
To be executed by transferor and transferee
74. Every such instrument of transfer shall be executed both by transferor and the transferee and
the transferor shall be deemed to remain the holder of such Share until the name of the
transferee shall have been entered in the Register of Members in respect thereof. The Board
shall not issue or register a transfer of any Share in favour of a minor (except in cases when
they are fully paid up and in the manner as provided hereinbelow).
75. Application for the registration of the transfer of a Share may be made either by the transferee
or the transferor. However, where an application is made by the transferor alone and relates to
partly paid shares, no registration shall be effected unless the Company gives notice of such
application to the transferee subject to the provisions of these Articles and Section 56 of the
Act and/or Applicable Law and the transferee gives no objection to the transfer within two
weeks from the date of receipt of the notice.
Transfer books when closed
76. The Board shall have power to give at least seven days‘ previous notice by advertisement in
some newspaper circulating in the district in which the registered office of the Company is
situated, in accordance with Section 91 of the Act and Applicable Laws, to close the transfer
books, the Register of Members, Register of Debenture holders or the Register of other
Security holders at such time or times and for such period or periods, not exceeding thirty
days at a time and not exceeding in the aggregate forty-five days in each year, as it may deem
expedient.
Directors may refuse to register transfer
77. Subject to the provisions of Section 56 of the Act, these Articles and other applicable
provisions of the Act or any other law for the time being in force, the Board may refuse, in the
interest of the Company or in pursuance of power under any Applicable Law, to register the
transfer of, or the transmission by operation of law of the right to, any shares or interest of a
member in or Debentures of the Company. The Company shall, from the date on which the
instrument of transfer, or the intimation of such transmission, as the case may be, was
delivered to the Company, send notice of the refusal to the transferee and the transferor or to
the person giving intimation of such transmission, as the case may be, giving reasons for such
refusal, within such time as permitted by Applicable Law. Provided that the registration of a
transfer shall not be refused on the ground of the transferor being either alone or jointly with
any other person or persons indebted to the Company on any account whatsoever except
where the Company has a lien on shares.
78. The Board may, subject to the right of appeal conferred by Section 58 of the Act and other
Applicable Law decline to register—
78.1 the transfer of a Share, not being a fully paid Share, to a person of whom they do not
approve; or
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78.2 any transfer of shares on which the Company has a lien.
79. The Board may decline to recognise any instrument of transfer unless—
79.1 the instrument of transfer is in the form as prescribed under sub-section (1) of Section
56 of the Act or Applicable Law;
79.2 the instrument of transfer is accompanied by the certificate of the shares to which it
relates, and such other evidence as the Board may reasonably require to show the right
of the transferor to make the transfer; and
79.3 the instrument of transfer is in respect of only one class of shares.
Directors to recognize Beneficial Owners of securities
80. Notwithstanding anything contained in these Articles, a Depository shall be deemed to be the
registered owner for the purpose of effecting transfer of ownership of Securities on behalf of a
Beneficial Owner.
81. Save as otherwise provided hereinabove, the Depository as a registered owner shall not have
any voting rights or any other rights in respect of securities held by it, and the Beneficial
Owner shall be entitled to all the rights and benefits and be subject to all the liabilities in
respect of its securities held by a Depository.
82. Except as ordered by a Court of competent jurisdiction or as required by law, the Company
shall be entitled to treat the person whose name appears as the Beneficial Owner of the
securities in the records of the Depository as the absolute owner thereof and accordingly the
Company shall not be bound to recognise any benami, trust or equitable, contingent, future or
partial interest in any Security or (except otherwise expressly provided by the Articles) any
right in respect of a Security other than an absolute right thereto, in accordance with these
Articles on the part of any other person whether or not it shall have express or implied notice
thereof.
Nomination
83. Every holder of Shares in, or Debentures of the Company may at any time nominate, in the
manner prescribed under the Act, a person to whom his shares in or Debentures of the
Company shall vest in the event of death of such holder.
84. Where the Shares in, or Debentures of the Company are held by more than one person jointly,
the joint holders may together nominate, in the prescribed manner, a person to whom all the
rights in the shares or Debentures of the Company, as the case may be, held by them shall vest
in the event of death of all joint holders.
85. Notwithstanding anything contained in any other law for the time being in force or in any
disposition, whether testamentary or otherwise, or in these Articles, in respect of such shares in
or Debentures of the Company, where a nomination made in the prescribed manner purports to
confer on any person the right to vest the shares in, or Debentures of the Company, the nominee
shall, on the death of the shareholders or holder of Debentures of the Company or, as the case
may be, on the death of all the joint holders become entitled to all the rights in the shares or
Debentures of the Company to the exclusion of all other persons, unless the nomination is
varied or cancelled in the prescribed manner under the provisions of the Act.
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86. Where the nominee is a minor, it shall be lawful for the holder of the Shares or holder of
Debentures to make the nomination to appoint, in the prescribed manner under the provisions
of the Act, any person to become entitled to the Shares in or Debentures of the Company, in the
event of his death, during the minority.
Provided that the Board may, at any time, give notice requiring any such person to elect either
to be registered himself or to transfer the Share or Debenture, and if the notice is not complied
within ninety days, the Board may thereafter withhold payment of all dividends, bonuses or
other moneys payable in respect of the share or debenture, until the requirement of the notice
have been complied with.
Transmission in the name of nominee
87. Any person becoming entitled to Shares or Debentures in consequence of the death, lunacy,
bankruptcy or insolvency of any member, or the marriage of a female member, or by any lawful
means other than by a transfer in accordance with These Presents, may with the consent of the
Board of Directors and subject as hereinafter provided, elect, either to be registered himself as
holder of the Shares or Debentures, as the case may be; or to make such transfer of the shares or
Debentures, as the case may be, as the deceased shareholder or Debenture holder, as the case
may be, could have made.
Provided nevertheless that it shall be lawful for the Directors in their absolute discretion to
dispense with the production of any evidence including any legal representation upon such
terms as to indemnity or otherwise as the Directors may deem fit.
Provided nevertheless, that if such person so becoming entitled, elects to register some other
person, he shall testify the election by executing an instrument of transfer in accordance with
the provisions herein contained and until he does so, he shall not be freed from any liability in
respect of the Shares or Debentures.
88. The Board shall, in either case, have the same right to decline or suspend registration as it
would have had, if the deceased or insolvent member had transferred the Share before his death
or insolvency.
89. If any person, so becoming entitled under Article 87, elects himself to be registered as holder of
the shares or Debentures, as the case may be, he shall deliver or send to the Company a notice
in writing signed by him stating that he so elects and such notice shall be accompanied with
death certificate of the deceased shareholder or Debenture holder and the certificate(s) of shares
or Debentures, as the case may be, held by the deceased in the Company.
90. If the person aforesaid shall elect to transfer the Share, he shall testify his election by executing
a transfer of the Share.
91. All the limitations, restrictions and provisions of these regulations relating to the right to
transfer and the registration of transfers of shares shall be applicable to any such notice or
transfer as aforesaid as if the death or insolvency of the member had not occurred and the
notice or transfer were a transfer signed by that member.
92. Subject to the provisions of Section 56 of the Act and these Articles, the Board may register the
relevant shares or Debentures in the name of the nominee of the transferee as if the death of the
registered holder of the shares or Debentures had not occurred and the notice or transfer were a
transfer signed by that shareholder or Debenture holder, as the case may be.
93. A nominee on becoming entitled to shares or Debentures by reason of the death of the holder or
joint holders shall be entitled to the same Dividend and other advantages to which he would be
entitled if he were the registered holder of the Share or Debenture, except that he shall not
before being registered as holder of such shares or Debentures, be entitled in respect of them to
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exercise any right conferred on a member or Debenture holder in relation to meetings of the
Company.
94. The Board may, at any time, give notice requiring any such person to elect either to be
registered himself or to transfer the shares or Debentures, and if the notice is not complied with
within ninety days, the Board may thereafter withhold payment of all dividends, bonus, interest
or other moneys payable or rights accrued or accruing in respect of the relevant shares or
Debentures, until the requirements of the notice have been complied with.
No transfer to minor, insolvent etc.
95. No transfer shall be made to a minor or person of unsound mind. However in respect of fully
paid up shares, shares may be transferred in favor of minor acting through legal guardian, in
accordance with the provisions of law.
Person entitled may receive Dividend without being registered as a Member
96. A person entitled to a Share by transmission shall, subject to the right of the Directors to retain
such dividends or money as hereinafter provided, be entitled to receive and may give discharge
for any dividends and other advantages to which he would be entitled if he were the registered
holder of the Share, except that he shall not, before being registered as a member in respect of
the Share, be entitled in respect of it to exercise any right conferred by membership in relation
to meetings of the Company.
Transfer to be presented with evidence of title
97. Every instrument of transfer shall be presented to the Company duly stamped for registration
accompanied by such evidence as the Board of Directors may require to prove the title of the
transferor, his right to transfer the shares and generally under and subject to such conditions and
regulations as the Board of Directors shall from time to time prescribe, and every registered
instrument of transfer shall remain in the custody of the Company until destroyed by order of
the Board of Directors.
Conditions of registration of transfer
98. For the purpose of the registration of a transfer, the certificate or certificates of the Share or
shares to be transferred must be delivered to the Company along with (same as provided in
Section 56 of the Act) a properly stamped and executed instrument of transfer.
No fee on transfer or transmission
99. No fee shall be charged for registration of transfer, transmission, probate, succession certificate
and letters of administration, certificate of death or marriage, power of attorney or similar other
document.
Company not liable for disregard of a notice in prohibiting registration of transfer
100. The Company shall incur no liability or responsibility whatsoever in consequence of its
registering or giving effect to any transfer of shares made or purporting to be made by any
apparent legal owner thereof (as shown or appearing in the Register of Members) to the
prejudice of persons having or claiming any equitable right, title or interest to or in the said
shares, notwithstanding that the Company may have had notice of such equitable right, title or
interest or notice prohibiting registration of such transfer, and may have entered such notice, or
deferred thereto, in any book of the Company, and the Company shall not be bound or required
to regard or attend or give effect to any notice which may be given to it of any equitable right
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title or interest, or be under any liability whatsoever for refusing or neglecting so to do, though
it may have been entered or referred to in some book of the Company; but the Company shall
nevertheless be at liberty to regard and attend to any such notice and give effect thereto, if the
Board of Directors shall so think fit.
DEMATERIALISATION OF SECURITIES
101. The provisions of this Article shall apply notwithstanding anything to the contrary contained in
any other Articles.
Dematerialization of Securities
102. The Board shall be entitled to dematerialize Securities or to offer securities in a dematerialized
form pursuant to the Depositories Act, as amended. The provisions contained in Articles101 to
113 will be applicable in case of such Securities as are or are intended to be dematerialized.
Options for investors
103. Every holder of or subscriber to Securities of the Company shall have the option to receive
certificates for such securities or to hold the securities with a Depository. Such a person who is
the Beneficial Owner of the securities can at any time opt out of a Depository, if permitted by
law, in respect of any securities in the manner provided by the Depositories Act, 1996, and the
Company shall, in the manner and within the time prescribed by law, issue to the Beneficial
Owner the required certificates for the Securities.
104. If a person opts to hold his Securities with the Depository, the Company shall intimate such
Depository the details of allotment of the Securities, and on receipt of the information, the
Depository shall enter in its record the name of the allottee as the Beneficial Owner of the
Securities.
Securities in depositories to be in fungible form
105. All securities held by a Depository shall be dematerialized and be in fungible form. Nothing
contained in Sections 89 and 186 of the Act shall apply to a Depository in respect of the
Securities held by it on behalf of the Beneficial Owners.
Rights of Depositories and Beneficial Owners
106. Notwithstanding anything to the contrary contained in these Articles, a Depository shall be
deemed to be the registered owner for the purposes of effecting transfer of ownership of
Securities of the Company on behalf of the Beneficial Owner.
107. Save as otherwise provided in Article 106 above, the Depository as the registered owner of the
Securities shall not have any voting rights or any other rights in respect of the Securities held
by it.
108. Every person holding Securities of the Company and whose name is entered as the Beneficial
Owner of securities in the record of the Depository shall be entitled to all the rights and benefits
and be subject to all the liabilities in respect of the Securities which are held by a Depository
and shall be deemed to be a Member of the Company.
Service of Documents
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109. Notwithstanding anything contained in these Articles to the contrary, where Securities of the
Company are held in a Depository, the records of the beneficiary ownership may be served by
such Depository on the Company by means of Electronic Mode.
Transfer of securities
110. Nothing contained in Section 56 of the Act or these Articles shall apply to a transfer of
Securities effected by a transferor and transferee both of whom are entered as Beneficial
Owners in the records of a Depository.
Allotment of securities dealt with in a Depository
111. Notwithstanding anything contained in the Act or these Articles, where Securities are dealt with
by a Depository, the Company shall intimate the details thereof to the Depository immediately
on allotment of such Securities.
Distinctive number of securities held in a Depository
112. Nothing contained in the Act or in these Articles regarding the necessity of having distinctive
numbers for Securities issued by the Company shall apply to Securities held with a Depository.
Register and index of Beneficial Owners
113. The Register and index of Beneficial Owners maintained by Depository under the Depositories
Act, as amended shall be deemed to be the Register and Index of Members and Security holders
for the purposes of these Articles.
COPIES OF MEMORANDUM AND ARTICLES TO BE SENT TO MEMBERS
114. Copies of memorandum and articles of association of the Company shall be furnished to every
shareholder of the Company at his request on payment of an amount as may be fixed by the
Board to recover reasonable cost and expenses, not exceeding such amount as fixed under
Applicable Law.
BORROWING POWERS
Power to borrow
115. The Board may, from time to time, at its discretion subject to the provisions of these Articles,
Section 73 to 76, 179, 180 of the Act or Applicable Law, raise or borrow, either from the
Directors or from elsewhere and secure the payment of any sum or sums of money for the
purpose of the Company; by a resolution of the Board, or where a power to delegate the same is
available, by a decision/resolution of such delegate, provided that the Board shall not without
the requisite sanction of the Company in General Meeting borrow any sum of money which
together with money borrowed by the Company (apart from temporary loans obtained from the
Company‘s bankers in the ordinary course of business) exceed the aggregate for the time being
of the paid up share Capital of the Company and its free reserves.
Conditions on which money may be borrowed
116. The Board may raise or secure the repayment of such sum or sums in such manner and upon
such terms and conditions in all respects as it thinks fit and in particular, by the issue of bonds,
or other Securities, or any mortgage, or other Security on the undertaking of the whole or any
part of the property of the Company (both present and future including its uncalled capital for
the time being).
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Terms of issue of Debentures
117. Any Debentures, Debenture stock, bonds or other Securities may be issued on such terms and
conditions as the Board may think fit. Provided that Debenture with a right to allotment or
conversion into shares shall be issued in conformity with the provisions of Section 62 of the
Act. Debentures, Debenture stock, bonds and other securities may be made assignable free from
any equities from the Company and the person to whom it may be issued. Debentures,
Debenture- stock, bonds or other securities with a right of conversion into or allotment of
Shares shall be issued only with such sanctions as may be applicable.
Instrument of transfer
118. Save as provided in Section 56 of the Act, no transfer of Debentures shall be registered unless a
proper instrument of transfer duly executed by the transferor and transferee has been delivered
to the Company together with the certificate or certificates of the Debentures: Provided that the
Company may issue non-transferable Debentures and accept an assignment of such
instruments.
Delivery of certificates
119. Deliver by the Company of certificates upon allotment or registration of transfer of any
Debentures, Debenture stock or bond issued by the Company shall be governed and regulated
by Section 56 of the Act.
Register of charge, etc.
120. The Board shall cause a proper register to be kept in accordance with the provisions of Section
85 of the Act of all mortgages, Debentures and charges specifically affecting the property of the
Company, and shall cause the requirements of Sections 77 to 87 of the Act, both inclusive of
the Act in that behalf to be duly complied with, so far as they are ought to be complied with by
the Board.
Register and index of Debenture holders
121. The Company shall, if at any time it issues Debentures, keep Register and Index of Debenture
holders in accordance with Section 88 of the Act. The Company shall have the power to keep in
any state or country outside India a branch register of Debenture-stock, resident in that State or
country.
GENERAL MEETINGS
122. The Company shall in each year hold a General Meeting as its Annual General Meeting in
addition to any other meetings in that year.
123. Every Annual General Meeting shall be called during business hours, that is, between 9 a.m.
and 6 p.m. on any day that is not a national holiday and shall be held either at the registered
office of the Company or at some other place within the city, town or village in which the
registered office of the Company is situated.
124. All general meetings other than Annual General Meeting shall be called Extraordinary General
Meeting.
125. In the case of an Annual General Meeting, all businesses to be transacted at the meeting shall
be deemed special, with the exception of business relating to:
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125.1. the consideration of financial statements and the reports of the Board of Directors and
Auditors;
125.2. the declaration of any Dividend;
125.3. the appointment of Directors in place of those retiring;
125.4. the appointment of, and the fixing of the remuneration of, the Auditors
126. In case of any other meeting, all business shall be deemed special.
127. The Board may, whenever it thinks fit, call an Extraordinary General Meeting.
128. Where permitted or required by Applicable Law, Board may, instead of calling a meeting of
any Member/ class of Members/ Debenture holders, seek their assent by Postal Ballot,
including e-voting. Such Postal Ballot will comply with the provisions of Applicable Law in
this behalf.
129. The intent of these Articles is that in respect of seeking the sense of the members or members
of a class or any Security holders, the Company shall, subject to Applicable Law, be entitled to
seek assent of members, members of a class of members or any holders of securities using such
contemporaneous methods of communication as is permitted by Applicable Law. A written
resolution including consent obtained through Electronic Mode shall be deemed to be sanction
provided by the member, member of a class or other Security holder by way of personal
presence in a meeting.
130. The Board may, whenever it thinks fit, call an Extraordinary General Meeting and it shall do so
upon a requisition in writing by any member or members holding in the aggregate not less than
one-tenth of such of the paid-up Capital as at the date carries the right of voting in regard to the
matter in respect of which the requisition has been made.
131. Any meeting called as above by the requisitionists shall be called in the same manner, as nearly
as possible, as that in which meetings are to be called by the Board.
E-votings in case of General Meetings:
132. Where the Company conducts General Meetings by way of e-voting, the Company shall follow
the procedure laid down under the Act and Applicable Law.
133. Where Member has been allowed the option of voting through Electronic Mode as per
Applicable Law, such Member, or Members generally, shall be allowed to speak at a Meeting,
but shall not be allowed to vote at the meeting unless permitted by applicable Law.
Provided that voting may also be allowed to be casted by way of poll or any other mode which
any Applicable Law may allow.
134. Where there is voting at General Meeting in addition to E-voting, the person chairing the
General Meeting may require a poll to be conducted. The person chairing the General Meeting
shall declare the results obtained through Electronic Modes and the result of the poll, at such
place and within such time as may be permitted by Applicable Law.
Notice of General Meetings
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135. At least 21 clear days‘ notice of every General Meeting, specifying the day, date, place and
hour of meeting, containing a statement of the business to be transacted thereat, shall be given,
either in writing or through Electronic Mode, to every Member or legal representative of any
deceased Member or the assignee of an insolvent Member, every Auditor(s) and Director of the
Company.
136. A General Meeting may be called at a shorter notice if consented to by either by way of writing
or any Electronic Mode by not less than 95% of the Members entitled to vote at such meeting.
Quorum at General Meeting
137. No business shall be transacted at any General Meeting unless a quorum of members is present
at the time when the meeting proceeds to business.
138. Save as otherwise provided herein, the quorum for the General Meetings shall be as provided in
Section 103 of the Act.
139. If, at the expiration of half an hour from the time appointed for holding a meeting of the
Company, a quorum shall not be present, the meeting, if convened by or upon the requisition of
members shall stand dissolved, but in any other case the meeting shall stand adjourned to the
same day in the next week or, if that day is a public holiday, until the next succeeding day
which is not a public holiday, at the same time and place, or to such other day and at such other
time and place as the Board may determine and if at such adjourned meeting a quorum is not
present at the expiration of half an hour from the time appointed for holding the meeting, the
members present shall be quorum and may transact the business for which the meeting was
called.
Chairperson at General Meetings
140. The Chairperson, if any, of the Board shall preside as chairperson at every General Meeting of
the Company.
141. If there is no such chairperson, or if he is not present within fifteen minutes after the time
appointed for holding the Meeting, or is unwilling to act as chairperson of the Meeting, the
Directors present shall elect one among themselves to be chairperson of the Meeting.
142. If at any Meeting no Director is willing to act as chairperson or if no Director is present within
fifteen minutes after the time appointed for holding the Meeting, the members present shall
choose one of themselves to be chairperson of the Meeting.
143. No business shall be discussed at any General Meeting except the election of a chairperson,
while the chair is vacant.
Adjournment of Meeting
144. The Chairperson may, with the consent of any Meeting at which a quorum is present, and shall,
if so directed by the meeting, adjourn the Meeting from time to time and from place to place.
145. No business shall be transacted at any adjourned Meeting other than the business left unfinished
at the Meeting from which the adjournment took place.
146. When a Meeting is adjourned for thirty days or more, notice of the adjourned meeting shall be
given as in the case of an original Meeting.
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147. Save as aforesaid, and as provided in Section 103 of the Act, it shall not be necessary to give
any notice of an adjournment or of the business to be transacted at an adjourned meeting.
Voting rights
148. No Member shall be entitled to vote either personally or by proxy, at any General Meeting or
Meeting of a class of shareholders in respect of any Shares registered in his name on which any
calls or other sums presently payable by him have not been paid or, in regard to which the
Company has, and has exercised any right of lien.
149. Subject to any rights or restrictions for the time being attached to any class or classes of
Shares,—
149.1. on a show of hands, every Member present in person shall have one vote; and
149.2. on a poll, the voting rights of Members shall be in proportion to his Share in the paid-up
equity share Capital of the Company.
149.3. A Member may exercise his vote at a Meeting by electronic means in accordance with
Section 108 of the Act and shall vote only once.
150. In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by
proxy, shall be accepted to the exclusion of the votes of the other joint holders.
For this purpose, seniority shall be determined by the order in which the names stand in the
Register of Members.
151. A Member of unsound mind, or in respect of whom an order has been made by any court
having jurisdiction in lunacy, may vote, whether on a show of hands or on a poll, by his
committee or other legal guardian, and any such committee or guardian may, on a poll, vote by
proxy.
152. Any business other than that upon which a poll has been demanded may be preceded with,
pending the taking of the poll.
153. No Member shall be entitled to vote at any General Meeting unless all calls or other sums
presently payable by him in respect of Shares in the Company have been paid.
154. No objection shall be raised to the qualification of any voter except at the meeting or adjourned
meeting at which the vote objected to is given or tendered, and every vote not disallowed at
such meeting shall be valid for all purposes.
155. Any such objection made in due time shall be referred to the chairperson of the Meeting, whose
decision shall be final and conclusive.
Proxy
156. Subject to the provisions of these Articles, votes may be given either personally or by proxy. A
body corporate being a Member may vote by a representative duly authorised in accordance
with Section 113 of the Act, and such representative shall be entitled to exercise the same rights
and powers (including the rights to vote by proxy) on behalf of the body corporate which he
represents as the body could exercise if it were an individual member.
157. The instrument appointing a proxy and the power-of-attorney or other authority, if any, under
which it is signed or a notarised copy of that power or authority, shall be deposited at the
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registered office of the Company not less than 48 hours before the time for holding the Meeting
or adjourned meeting at which the person named in the instrument proposes to vote, or, in the
case of a poll, not less than 24 hours before the time appointed for the taking of the poll; and in
default the instrument of proxy shall not be treated as valid. No instrument appointing a proxy
shall be valid after the expiration of twelve months from the date of its execution.
158. Every proxy (whether a member or not) shall be appointed in writing under the hand of the
appointer or his attorney, or if such appointer is a body corporate, under the Seal of such
corporate, or be signed by an officer or any attorney duly authorised by it, and any committee
or guardian may appoint such proxy. An instrument appointing a proxy shall be in the form as
prescribed in terms of Section 105 of the Act.
159. A Member present by proxy shall be entitled to vote only on a poll, except where Applicable
Law provides otherwise.
160. The proxy so appointed shall not have any right to speak at the meeting.
161. A vote given in accordance with the terms of an instrument of proxy shall be valid,
notwithstanding the previous death or insanity of the principal or the revocation of the proxy or
of the authority under which the proxy was executed, or the transfer of the Shares in respect of
which the proxy is given:
Provided that no intimation in writing of such death, insanity, revocation or transfer shall have
been received by the Company at its office before the commencement of the Meeting or
adjourned Meeting at which the proxy is used.
Passing of resolution by Postal Ballot
162. Where permitted or required by Applicable Law, Board may, instead of calling a meeting of
any Members/ class of Members/ Debenture holders, seek their assent by Postal Ballot, which
shall include e-voting. Such Postal Ballot will comply with the provisions of Applicable Law in
this behalf.
163. Where permitted/required by Applicable Law, Board may provide Members/Members of a
class/Debentureholders right to vote through e-voting, complying with Applicable Law.
164. The intent of these Articles is that in respect of seeking the sense of the Members or Members
of a class or any Security holders, the Company shall, subject to Applicable Law, be entitled to
seek assent of Members, Members of a class of Members or any holders of securities using
such use of contemporaneous methods of communication as is permitted by Applicable Law. A
written resolution, including consent obtained through Electronic Mode, shall be deemed to be
sanction provided by the Member, Member of a class or other Security holders by way of
personal presence in a meeting.
165. Notwithstanding anything contained in the foregoing, the Company shall transact such
business, follow such procedure and ascertain the assent or dissent of Members for a voting
conducted by Postal ballot, as may be prescribed by Section 110 of the Act and Applicable
Law.
166. In case of resolutions to be passed by Postal ballot, no Meeting needs to be held at a specified
time and space requiring physical presence of Members to form a quorum.
167. Where a resolution will be passed by Postal ballot the Company shall, in addition to the
requirements of giving requisite clear days‘ notice, send to all the Members the following:
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167.1. Draft resolution and relevant explanatory statement clearly explaining the reasons
thereof.
167.2. Postal ballot for giving assent or dissent, in writing by Members; and
167.3. Enable Member, in such manner as prescribed under Applicable Law, for communicating
assents or dissents on the Postal ballot to the Company with a request to the Members to
send their communications within 30 days from the date of dispatch of the notice.
Maintenance of records and Inspection of minutes of General Meeting by Members
168. Where permitted/required by Applicable Law, all records to be maintained by the Company
may be kept in electronic form subject to the provisions of the Act and the conditions as laid
down in the Applicable Law. Such records shall be kept open to inspection in the manner as
permitted by the Act and Applicable Law. The term ‗records‘ would mean any register, index,
agreement, memorandum, minutes or any other document required by the Act and Applicable
Law made there under to be kept by the Company.
169. The Company shall cause minutes of all proceedings of every General Meeting to be kept by
making within thirty days of the conclusion of every such Meeting concerned, entries thereof in
books kept for that purpose with their pages consecutively numbered.
170. Any such minutes shall be evidence of the proceedings recorded therein.
171. The book containing the minutes of proceedings of General Meetings shall be kept at the
registered office of the Company and shall be open during business hours, for such periods not
being less than 2 hours on any day, as may be fixed by the company secretary from time to
time, to the inspection of any Member without charge.
172. Any Member of the Company shall be entitled to a copy of minutes of the General Meeting on
receipt of a specific request and at a fee of Rs. 10/- (rupees ten only) for each page, or such
higher amount as the Board may determine, as permissible by Applicable Law.
BOARD OF DIRECTORS
173. The number of Directors of the Company shall be not less than 3 (three) and not more than 15
(fifteen). However, the Company may appoint more than 15 Directors after passing a Special
Resolution. Further, any person or persons shall have power to nominate a Director of the
Company, then in the case of any and every such issue of debenture, the person or persons
having such power may exercise such power from time to time and appoint a Director
accordingly and such appointment shall be in such terms and conditions as laid down by Board,
as permitted by Applicable Law. The Directors are not required to hold any qualification
shares. Composition of the Board shall be in accordance with the provisions of Section 149 of
the Act and other Applicable Laws. Provided that where there are temporary gaps in meeting
the requirements of Applicable Law pertaining to composition of Board of Directors, the
remaining Directors shall (a) be entitled to transaction business for the purpose of attaining the
required composition of the Board; and (b) be entitled to carry out such business as may be
required in the best interest of the Company in the meantime.
174. The following persons shall be the First Directors of the Company :–
174.1. SHRI SHIV PRAKASH MITTAL
174.2. SHRI RAJESH MITTAL
174.3. SHRI SAURABH MITTAL
174.4. SHRI SHOBHAN MITTAL
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Board’s power to appoint Additional Directors
175. Subject to the provisions of Sections 149, 152 and 161 of the Act and Applicable Laws, the
Board shall have power at any time, and from time to time, to appoint a person as an additional
Director, provided the number of the Directors and additional Directors together shall not at
any time exceed the maximum strength fixed for the Board by these Articles.
176. Such person shall hold office only up to the date of the next Annual General Meeting of the
Company but shall be eligible for appointment by the Company as a Director at that meeting
subject to the provisions of the Act.
Nominee Directors
177. The Company shall, subject to the provisions of the Act and these Articles, be entitled to agree
with any Person that he or it shall have the right to appoint his or its nominee on the Board, not
being an Independent Director, upon such terms and conditions as the Company may deem fit.
He shall be entitled to the same rights and privileges and be subject to the same obligations as
any other Director of the Company.
178. In the event of Company borrowing any money from any financial corporation or institution or
Government or any Government body or a collaborator, bank, person or persons or from any
other source, while any money remains due to them or any of them, the lender concerned may
have and may exercise the right and power to appoint, from time to time, any person or persons
to be a Director or Directors of the Company.
179. A nominee Director may at any time be removed from the office by the appointing authority
who may from the time of such removal or in case of death or resignation of person, appoint
any other or others in his place. Any such appointment or removal shall be in writing, signed by
the appointer and served on the Company. Such Director need not hold any qualification shares.
Appointment of Alternate Directors
180. Subject to the provisions of Section 161(2) of the Act, the Board may appoint an alternate
Director to act for a Director (hereinafter called ―the Original Director‖) during his absence for
a period of not less than three months from India. No person shall be appointed as an alternate
Director in place of an Independent Director unless he is qualified to be appointed as an
Independent Director under the Act and Applicable Law. An Alternate Director appointed
under this Article shall not hold office for a period longer than that permissible to the Original
Director in whose place he has been appointed and shall vacate the office if and when the
Original Director returns to India. If the terms of office of the Original Director are determined
before he so returns to India, any provisions in the Act or in these Articles for the automatic
reappointment of any retiring Director in default of another appointment shall apply to the
Original Director, and not to the alternate Director.
For the purpose of absence in the Board meetings in terms of Section 167 (1) (b) of the Act, the
period during which an Original Director has an alternate Director appointed in his place, shall
not be considered.
Board’s power to fill vacancies
181. Subject to the provisions of Sections 152(7), 161(4) and 169(7) of the Act, the Board shall have
power at any time and from time to time to appoint any other qualified person to be a Director
to fill a casual vacancy. Any person so appointed shall hold office only up to the date to which
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the Director in whose place he is appointed would have held office if it had not been vacated by
him.
182. If the place of the retiring Director is not filled up and the Meeting has not expressly resolved
not to fill the vacancy, the meeting shall stand adjourned until the same day in the next week, at
the same time and place in accordance with the provisions of Section 152(7) of the Act.
183. If at the adjourned meeting also, the vacancy caused by the retiring Director is not filled up and
that meeting also has not expressly resolved not to fill the vacancy, the retiring Director shall be
so deemed to have been reappointed at the adjourned meeting, unless :
183.1. at that meeting or at the previous meeting the resolution for the reappointment of such
Director has been put to the meeting and lost;
183.2. the retiring Director has, by a notice in writing addressed to the Company or its
Board expressed his unwillingness to be so reappointed;
183.3. he is not qualified or is disqualified for appointment;
183.4. a resolution whether special or ordinary, is required for the appointment or
reappointment by virtue of any provisions of the Act; or
183.5 the provision of Section 162 of the Act is applicable to the case.
Independent Directors
184. Subject to the provisions of Section 149(6) of the Act and other Applicable Laws, the Board or
any other Committee as per the Act shall identify potential individuals for the purpose of
appointment as Independent Director either from the databank established under Section 150 of
Act or otherwise.
185. The Board on receiving such recommendation shall consider the same and propose his
appointment for approval at a General Meeting. The explanatory statement to the notice for
such General Meeting shall provide all requisite details as required under the Act.
186. Any casual vacancy in the post of an Independent Director caused by way of removal,
resignation, death, vacation of office under Section 167 of the Act and Applicable Law or
removal from directorship pursuant to any court order or due to disqualification under Section
164 of Act shall be filled by following the process laid down herein belowand in accordance
with the Applicable Law. No such casual vacancy shall prejudice the functioning of the Board
during the intervening period.
187. Every Independent Director shall at the first meeting of the Board in which he participates as a
Director and thereafter at the first meeting of the Board in every financial year or whenever
there is any change in the circumstances which may affect his status as an Independent
Director, give a declaration that he meets the criteria of independence.
188. The Company and Independent Directors are required to abide by the provisions specified in
Schedule IV of the Act.
189. An Independent Director shall not be entitled to any stock option and may receive remuneration
by way of sitting fee, reimbursement of expenses for participation in the Board and other
meetings and also to such commission based on profits, as may, subject to provisions of
Applicable Law, be approved by the Members.
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190. An Independent Director shall be held liable, only in respect of such acts of omission or
commission by a Company which had occurred with his knowledge, attributable through Board
processes, and with his consent or connivance or where he had not acted diligently.
191. The provisions relating to retirement of Directors by rotation shall not be applicable to
appointment of Independent Directors.
192. Term of Office of Independent Director:
Subject to Applicable Law, an Independent Director shall hold office for a term up to 5 (five)
consecutive years on the Board of a Company, but shall be eligible for reappointment for one
more term on passing of a Special Resolution by the Company and disclosure of such
appointment in the Board‘s report.
No Independent Director shall hold office for more than 2 (two) consecutive terms, but such
Independent Director shall be eligible for appointment after the expiration of 3(three) years of
ceasing to become an Independent Director provided that he shall not, during the said period of
3 (three) years, be appointed in or be associated with the Company in any other capacity, either
directly or indirectly.
Retirement and rotation of Directors
193. At least two-thirds of the total number of Directors, excluding Independent Directors, will be
the Directors who are liable to retire by rotation (hereinafter called ―the Rotational Directors‖).
194. At every Annual General Meeting of the Company, one-third of the Rotational Directors, or if
their number is not three or a multiple of three, then, the number nearest to one-third, shall
retire from office.
195. The Company may appoint a managing or a whole-time director, or any other executive
director, as Rotational Director and the rotation of these Directors pursuant to Article 194 shall
not be construed as a break in their tenure of appointment.
196. A retiring Director shall be eligible for re-election.
Resignation of Directors
197. Subject to the provisions of Applicable Law, a Director may resign from his office by giving a
notice in writing to the Company and Board shall take note of the same. The fact of such
resignation shall be mentioned in the report of Directors laid in the immediately following
General Meeting by the Company.
198. A managing director or a whole-time director or any executive director who has any terms of
employment with the Company shall not give any notice of resignation in breach of the
conditions of employment as may be applicable, either to a Director specifically, or to
employees of the Company generally. A nominee Director shall not give any notice of
resignation except through the nominating person.
199. The resignation of a Director shall take effect from the date on which the notice is received by
the Company or the date, if any, specified by the Director in the notice, whichever is later. In
case of resignation by a whole-time Director or Managing Director, the resignation shall be
effective as per the terms of appointment as mutually agreed and as may be permitted by
Applicable Law.
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Provided that the Director who has resigned shall be liable even after his resignation for the
offences which occurred during his tenure.
Removal of Directors
200. Any Director of the Company, except the one appointed by the National Company Law
Tribunal, may be removed by way of Ordinary Resolution before the expiry of his term of
office, subject to the provisions of Section 169 of Act.
Remuneration of Directors
201. Subject to the provisions of Section 197 of the Act, a Director may be paid remuneration either
by way of a monthly payment or at a specified percentage of the net profits of the Company or
partly by one way and partly by the other.
Provided that where the Company takes a directors‘ and officers‘ liability insurance,
specifically pertaining to a particular Director and/or officer, then the premium paid in respect
of such insurance, for the period during which a Director and/or officer has been proved guilty,
will be treated as part of remuneration paid to such Director and/or officer.
202. The Board or a relevant Committee constituted for this purpose shall seek to ensure that the
remuneration paid to Directors, key managerial personnel and senior management involves a
balance between fixed and incentive pay reflecting short and long-term performance objectives
appropriate to the working of the Company and its goals.
203. The fees payable to a Director for attending the meetings of the Board or Committee thereof
shall be such sum as may be decided by the Board of Directors from time to time within the
maximum limit as prescribed under Section 197(5) of the Act and Applicable Law. Fee shall
also be paid for attending any separate meeting of the Independent Directors of the Company in
pursuance of any provision of the Act. Fee shall also be payable for participating in meetings
through permissible Electronic Mode.
204. A Director of this Company may be or become a Director of any company promoted by this
Company or in which it may be interested as a vendor, shareholders or otherwise, and no such
Director shall be accountable for any benefits received as a Director or member of such
Company.
205. In addition to the remuneration payable pursuant to Section 197 of the Act, the Directors may
be paid all conveyance, hotel and other expenses properly incurred by them—
a. in attending and returning from meetings of the Board of Directors or any Committee
thereof or general meetings of the Company; or
b. in connection with the business of the Company.
Directors may act notwithstanding any vacancies on Board
206. The continuing Directors may act notwithstanding any vacancy in their body but if, and so long
as their number is reduced below the minimum number fixed by These Presents, the continuing
Directors may act for the purpose of increasing the number of Directors to the minimum
number fixed by These Presents or for summoning a General Meeting for the purpose
increasing the number of Directors to such minimum number, but for no other purpose.
Vacation of office of Director
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207. The office of a Director shall ipso facto be vacated:
a. on the happening of any of the events as specified in Section 167 of the Act.
b. in the case of alternate Director, on return of the original Director in terms of Section 161
of the Act;
c. having been appointed as a Director by virtue of his holding any office or other
employment in the holding, subsidiary or associate company, he ceases to hold such
office or other employment in that company;
d. if he is removed in pursuance of Section 169 of the Act;
e. any other disqualification that the Applicable Law for the time being in force may
prescribe.
Notice of candidature for office of Directors except in certain cases
208. No person not being a retiring Director, shall be eligible for appointment to the office of
Director at any General Meeting unless he or some Member intending to propose him as a
Director, has, not less than fourteen days before the meeting, left at the registered office of the
Company a notice in writing under his hand signifying his candidature for the office of Director
or the intention of such Member to propose him as a candidate for that office along with the
requisite deposit of Rupees 1 Lac or such higher amount as the Board may determine, as
permissible by Applicable Law.
209. Every person (other than a Director retiring by rotation or otherwise or a person who has left at
the office of the Company a notice under Section 160 of the Act signifying his candidature for
the office of a Director) proposed as a candidate for the office of a Director, shall sign and file
with the Company, the consent in writing to act as a Director, if appointed.
210. A person other than a Director reappointed after retirement by rotation immediately on the
expiry of his term of office, or an Additional or Alternate Director, or a person filling a casual
vacancy in the office of a Director under Section 161 of the Act, appointed as a Director or
reappointed as an Additional or Alternate Director, immediately on the expiry of his term of
office, shall not act as a Director of the Company unless he has submitted consent in writing to
act as a Director of the Company and the same is filed with the Registrar within thirty days of
his appointment.
Director may contract with the Company
211. Subject to Applicable Law, a Director or any Related Party as defined in Section 2 (76) of the
Act or other Applicable Law may enter into any contract with Company for the sale, purchase
or supply of any goods, materials, or services, or other contract involving creation or transfer of
resources, obligations or services, subject to such sanctions as required by Applicable Law.
212. Unless so required by Applicable Law, no sanction shall, however, be necessary for any
contracts with a related party entered into on arm‘s length basis. Where a contract complies
with such conditions or indicia of arms‘ length contracts as laid down in a policy on related
party transactions framed by the Board and approved by a general meeting, the contract shall be
deemed to be a contract entered into on arm‘s length basis.
Register of contracts or arrangements in which Directors are interested
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213. The Company shall keep a Register in accordance with Section 189 (1) of the Act and
Applicable Law. The Register shall be kept at the registered office of the Company and shall be
preserved permanently be kept in the custody of the Company Secretary of the Company or any
other person authorized by the Board for the purpose.
214. Such a Register shall be open to inspection at such office, and extracts maybe taken therefrom
and copies thereof may be provided to a Member of the Company on his request, within seven
days from the date on which such request is made and upon the payment of Rs. 10 (ten rupees)
per page, or such higher amount as may be laid by the Board, as permitted by Applicable Law.
Register of Directors and Key Managerial Personnel and their shareholding
215. The Company shall keep at its registered office a register containing the particulars of its
Directors and Key Managerial Personnel, which shall include the details of Securities held by
each of them in the Company or its holding, subsidiary, subsidiary of Company‘s holding
Company or associate companies in accordance to Section 170 of the Act and Applicable Law.
Miscellaneous
216. All cheques, promissory notes, drafts, hundis, bills of exchange and other negotiable
instruments, and all receipts for monies paid to the Company, shall be signed, drawn, accepted,
endorsed, or otherwise executed, as the case may be, by such person and in such manner as the
Board shall from time to time by resolution determine.
PROCEEDINGS OF THE BOARD
Meetings of Board
217. The Directors may meet together as a Board from time to time for the conduct and dispatch of
the business of the Company, adjourn or otherwise regulate its meetings, as it thinks fit.
218. A meeting of the Board shall be called by giving not less than seven days' notice in writing to
every Director at his address registered with the Company and such notice shall be sent by hand
delivery or by post or by electronic means.
219. The notice of the meeting shall inform the Directors regarding the option available to them to
participate through Electronic Mode, and shall provide all the necessary information to enable
the Directors to participate through such Electronic Mode.
A meeting of the Board may be called at shorter notice to transact urgent business subject to the
condition that at least one Independent Director, if any, shall be present at the meeting, or in
case of absence of Independent Directors from such a meeting of the Board, decisions taken at
such a meeting shall be circulated to all the Directors and shall be final only on ratification
thereof by at least one Independent Director. Where the Company does not have, for the time
being, any Independent Director, a Board meeting may be called at a shorter notice where such
notice is approved by a majority of Directors present at such meeting.
220. The Board shall meet at such intervals as permitted by Applicable Law. The Directors may
adjourn and otherwise regulate their meetings as they think fit.
221. Every Director present at any meeting of the Board or of a Committee thereof shall sign his
name in a book to be kept for that purpose. The names of Directors who have participated in
Board meetings through Electronic Mode shall be entered and initialled by the Company
Secretary, stating the manner in which the Director so participated
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Meetings of Board by Video/audio-visual conferencing
222. Subject to the provisions of Section 173(2) of the Act and Applicable Law, the Directors may
participate in meetings of the Board otherwise through physical presence, Electronic Mode as
the Board may from time to time decide and Directors shall be allowed to participate from
multiple locations through modern communication equipment for ascertaining the views of
such Directors who have indicated their willingness to participate by such Electronic Mode, as
the case may be.
Regulation for meeting through Electronic Mode
223. The Board may, by way of a resolution passed at a meeting, decide the venues where
arrangements may be made by the Company, at the Company‘s cost, for participation in Board
meetings through Electronic Mode, as the case may be, in accordance to the provisions of
173(2) of the Act and Applicable Law. In case of a place other than such places where
Company makes arrangements as above, the Chairperson may decline the right of a Director to
participate through Electronic Mode in view of concerns of security, sensitivity and
confidentiality of Board proceedings. Where the Chairperson so permits a Director to
participate from a place other than the designated places where the Company has made the
arrangements, the security and confidentiality of the Board proceedings shall be the
responsibility of the Director so participating, and the cost and expense in such participation,
where agreed to by the Chairperson, may be reimbursed by the Company.
224. Subject as aforesaid, the conduct of the Board meeting where a Director participates through
Electronic Mode shall be in the manner as laid down in Applicable Law.
225. The rules and regulations for the conduct of the meetings of the Board, including for matters
such as quorum, notices for meeting and agenda, as contained in these Articles, in the Act
and/or Applicable Law, shall apply to meetings conducted through Electronic Mode, as the case
may be.
226. Upon the discussions being held by Electronic Mode, as the case may be, the Chairperson or
the Company Secretary shall record the deliberations and get confirmed the views expressed,
pursuant to circulation of the draft minutes of the meeting to all Directors to reflect the decision
of all the Directors participating in such discussions.
227. Subject to provisions of Section 173 of the Act and the Applicable Laws, a Director may
participate in and vote at a meeting of the Board by means of Electronic Mode which allows all
persons participating in the meeting to hear and see each other and record the deliberations.
Where any Director participates in a meeting of the Board by any of the means above, the
Company shall ensure that such Director is provided with a copy of all documents referred to
during such Board meeting prior to the commencement of this Board Meeting.
When can a meeting be convened
228. The Managing Director or a Director may, and the Manager or Company Secretary upon the
requisition of Director(s) shall, at any time, summon a meeting of the Board.
Notice of meeting
229. Notice of every meeting of the Board shall be given in writing including by way of electronic
means, not later than seven days, to every Director at his registered address with the Company.
230. The notice of a meeting of the Board must contain information regarding the option available to
them to participate through Electronic Mode, and shall provide all the necessary information to
enable the Directors to participate through such Electronic Mode.
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Chairperson for Board Meetings
231. The Board may elect a Chairperson and determine the period for which he is to hold office.
Such Chairperson shall preside at all the Board Meetings of the Company.
232. If no such Chairperson is elected, or if at any meeting the Chairperson is not present within five
minutes after the time appointed for holding the meeting, the Directors present may choose one
of their numbers to be Chairperson of the meeting.
Quorum
233. The quorum for a meeting of the Board shall be determined from time to time in accordance
with the provisions of the Section 174 of the Act. If a quorum is not present within thirty
minutes from the time appointed for holding a meeting of the Board it shall be adjourned until
such date and time as the Chairperson of the Board or in his absence, the other Directors
present shall decide.
234. The continuing Directors may act notwithstanding any vacancy in the Board; but, if and so long as
their number is reduced below the quorum fixed by the Act for a meeting of the Board, the continuing
Directors or Director may act for the purpose of increasing the number of Directors to that fixed for
the quorum, or of summoning a general meeting of the Company and for no other purpose.
Exercise of powers to be valid in meetings where quorum is present
235. A meeting of the Board of which a quorum be present shall be competent to exercise all or any
of the authorities, powers and discretions by or under these Articles for the time being vested in
or exercisable by the Board, or in accordance with Section 179 (1) of the Act, the powers of the
Company.
Matter to be decided on majority of votes
236. Save as otherwise expressly provided in the Act, questions arising at any meeting of the Board
shall be decided by a majority of votes. In case of an equality of votes, the Chairperson of the
Board shall have a second or casting vote.
Power to appoint Committee and to delegate powers
237. The Board may, subject to the provisions of the Act, from time to time and at any time delegate
any of its powers to committees consisting of such Director or Directors as it thinks fit, and
may from time to time revoke such delegation. Unless a power of the Board is not capable of
being delegated, such power may be delegated by the Board to any officer or committee of
officers as the Board may determine.
238. Any committee of the Board so formed shall, in the exercise of the powers so delegated,
conform to any regulations that may from time to time be imposed on it by the Board.
239. The meetings and the proceedings of any such Committee consisting of two or more members
shall be governed by the provisions herein contained for regulating the meetings and
proceedings of the Board so far as the same are applicable thereto, and are not superseded by
any regulations made by the Board.
Resolution without Board Meeting/ Resolution by Circulation
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240. Save as otherwise expressly provided in the Act to be passed at a meeting of the Board and
subject to Section 175 of the Act or Applicable Laws, a resolution shall be as valid and effectual
as if it had been passed at a meeting of the Board or Committee of the Board, as the case may be,
duly called and constituted, if a draft thereof in writing is circulated, together with the necessary
papers, if any, to all the Directors, or to all the members of the Committee of the Board, as the
case may be, at their addresses registered with the Company in India (not being less in number
than the quorum fixed for a meeting of the Board or Committee, as the case may be), and has
been approved by a majority of the Directors or members as are entitled to vote on the resolution.
Provided that, where not less than one-third of the total number of Directors of the Company
for the time being require that any resolution under circulation must be decided at a meeting,
the chairperson shall put the resolution to be decided at a Board Meeting.
Provided further that where the resolution has been put to vote at a Board Meeting, the consent
or dissent of the Directors obtained by way of resolution by circulation shall be rendered void
and not be given effect to.
Acts of Board / Committee valid notwithstanding formal appointment
241. All acts done in any meeting of the Board or of a Committee thereof or by any person acting as a
Director, shall, notwithstanding that it may be afterwards discovered that there was some defect in
the appointment of any one or more of such Directors or of any person acting as aforesaid, or that
they or any of them were disqualified or had vacated office or that the appointment of any of them
had been terminated by virtue of any provisions contained or in these Articles, be as valid as if
every such Director or such person had been duly appointed and was qualified to be a Director
and had not vacated his office or his appointment had not been terminated; provided that nothing
in this Article shall be deemed to give validity to acts done by a Director after his appointment
has been shown to the Company to be invalid or to have been terminated.
Minutes of proceedings of meeting of Board
242. The Company shall cause minutes of proceedings of every meeting of the Board and
Committee thereof to be kept in such form by making within thirty days of the conclusion of
every such meeting, entries thereof in the books kept for that purpose with their pages
consecutively numbered in accordance to Section 118 of the Act or Applicable Laws.
243. Each page of every such book shall be initialled or signed and the last page of the record of
proceedings of each meeting in such book shall be dated and signed by the Chairperson of the
said meeting or the Chairperson of the next succeeding meeting.
244. In no case shall the minutes of proceedings of a meeting be attached to any such book as
aforesaid by a pasting or otherwise, if the minutes are kept in physical form.
245. The minutes of each meeting shall contain a fair and correct summary of the proceedings
thereat.
246. Where the meeting of the Board takes place through Electronic Mode, the minutes shall disclose
the particulars of the Directors who attended the meeting through such means. The draft minutes
of the meeting shall be circulated among all the Directors of the meeting either in writing or in
Electronic Mode as may be decided by the Board in accordance with Applicable Law.
247. Every Director who attended the meeting, whether personally or through Electronic Mode, shall
confirm or give his comments in writing, about the accuracy of recording of the proceedings of
that particular meeting in the draft minutes, within seven days or as permitted by Applicable
Law, after receipt of the draft minutes failing which his approval shall be presumed.
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248. All appointments of officers made at any of the meetings aforesaid shall be included in the
minutes of the meetings.
249. The minutes shall also contain:
a. The names of the Directors present at the meeting; and
b. In the case of each resolution passed at the meeting the names of the Directors, if any,
dissenting from or not concurring in the resolution.
250. Nothing contained in Articles 243 to247herein above, shall be deemed to require the inclusion in
any such minutes of any matter which, in the opinion of the Chairperson of the meeting :
a. is, or could reasonably be regarded as defamatory of any person.
b. is irrelevant or immaterial to the proceedings; or
c. is detrimental to the interest of the Company.
251. The Chairperson shall exercise an absolute discretion in regard to the inclusion or non-inclusion
of any matter in the minutes on the grounds specified in this Article.
252. Minutes of meetings kept in accordance with the aforesaid provisions shall be evidence of the
proceedings recorded therein.
253. Any Director of the Company may requisition for physical inspection of the Board Meeting
minutes by giving a prior notice of seven days.
Provided that the Director can requisition to inspect Board Meeting minutes only for the period
he is on the Board of the Company.
Provided further that the physical inspection shall be done solely by the Director himself and
not by his authorised representative or any power of attorney holder or agent.
Powers of Board
254. The Board may exercise all such powers of the Company and do all such acts, and things as are
not, by the Act and Applicable Law made thereunder, or any other Act, or by the
Memorandum, or by these Articles of the Company, required to be exercised by the Company
in General Meeting subject nevertheless to these Articles, to the provisions of the Act and the
Applicable Law made thereunder, or any other Act and to such regulations being not
inconsistent with the aforesaid regulations or provisions, as may be prescribed by the Company
in General Meeting; but no regulations made by the Company in General Meeting shall
invalidate any prior act of the Board which would have been valid if that regulation had not
been made.
255. The Directors may make such arrangements as may be thought fit for the management of the
Company‘s affairs abroad and may for this purpose (without prejudice to the generality of their
powers) constitute a committee , appoint attorneys and agents and fix their remuneration and
delegate them such powers as may be deemed requisite or expedient. The Company may have
for use abroad such official seal as the Board may lay down. Such seal shall be affixed by the
authority and in the presence of and the instruments scaled therewith shall be signed by such
persons as the Directors shall from time to time by writing under the Seal appoint. The
Company may also exercise the powers of keeping foreign registers as provided by the Act.
256. The Board may, subject to Applicable Law, also give a loan to a Director or any entity in which
the Director is interested. Where any sum of money is payable by a Director, the Board may
allow such time for payment of the said money as is acceptable within customary periods for
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payment of similar money in contemporaneous commercial practice. Grant of such period for
payment shall not be deemed to be a ―loan‖ or grant of time for the purpose of sec 180 (1) (d)
of the Act and Applicable Law.
257. a. The Board may subject to Section 186 of the Act and provisions of Applicable Law made
thereunder shall by means of unanimous resolution passed at meeting of Board from time to time,
invest, provide loans or guarantee or security on behalf of the Company to any person or entity.
b. Subject to the provisions of Act the Directors or any of them may guarantee the whole or any
part of the loans or debts raised or incurred by or on behalf of the Company or any interest
payable hereon and shall be entitled to receive such payment as consideration for the giving of
any such guarantee as may be determined by the Directors with power to them to indemnify the
guarantors from or against liability under their guarantees by means of a mortgage or charge on
the undertaking of the Company or upon any of its property or assets or otherwise. If the
Directors or any of them or any other persons, shall become personally liable for the payment
of any sum primarily due from the Company, the Directors may execute or cause to be
executed and mortgage, charge or security over or affecting the whole or any part of the assets
of the Company by way of indemnity to secure the Directors or persons so becoming liable as
aforesaid from any loss in respect of such liability.
Restriction on powers of Board
258. Board of Directors should exercise the following powers subject to the approval of Company
by a Special Resolution:
a. to sell, lease or otherwise dispose of the whole or substantially the whole of the
undertaking of the Company or where the Company owns more than one undertaking, of
the whole or substantially the whole of any of such undertakings.
b. to invest otherwise in trust securities the amount of compensation received by it as a
result of any merger or amalgamation;
c. to borrow money, where the money to be borrowed, together with the money already
borrowed by the Company will exceed aggregate of its paid-up share Capital and free-
reserves, apart from temporary loans obtained from the Company‘s bankers in the
ordinary course of business.
d. to remit, or give time for the repayment of, any debt due from a Director.
Contribution to charitable and other funds
259. The Board of Directors of a Company may contribute to bona fide charitable and other fund. A
prior permission of the Company in general meeting (ordinary resolution) shall be required for
if the aggregate of such contributions in a financial year exceeds 5% (five per cent) of its
average net profits for the three immediately preceding financial years.
Absolute powers of Board in certain cases
260. Without prejudice to the general powers conferred by Section 179(3) of the Act or Applicable
Laws made thereunder and the last preceding Article and so as not in any way to limit or
restrict those powers, and without prejudice to the other powers conferred by these Articles, but
subject to the restrictions contained in these Articles or the Applicable Law , it is hereby
declared that the Directors shall have the following powers; that is to say, power :
a. To pay the costs, charges and expenses preliminary and incidental to the promotion,
formation, establishment and registration of the Company.
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b. To pay any or interest lawfully payable there out under the provisions of Section 40 of
the Act.
c. To act jointly and severally in all on any of the powers conferred on them.
d. To appoint and nominate any Person(s) to act as proxy for purpose of attending and/or
voting on behalf of the Company at a meeting of any Company or association.
e. To comply with the provisions of Applicable Law which in their opinion shall, in the
interest of the Company be necessary or expedient to comply with.
f. To make, vary and repeal bye-laws for regulation of business of the Company and duties
of officers and servants.
g. Subject to Sections 179 and 188 of the Act to purchase or otherwise acquire for the
Company any property, rights or privileges which the Company is authorised to acquire,
at or for such price or consideration and generally on such terms and conditions as they
may think fit and in any such purchase or other acquisition to accept such title as the
Directors may believe or may be advised to be reasonably satisfactory.
h. Subject to the provisions of the Act and Applicable Laws, to pay for any property, rights
or privileges acquired by or services rendered to the Company, either wholly or partially,
in Shares, bonds, Debentures, mortgages, or other securities of the Company, and such
Shares may be issued either as fully paid up or with such amount credited as paid up
thereon as may be agreed upon all or any part of the property of the Company and its
uncalled Capital or not so charged;
i. To secure the fulfilment of any contracts or engagement entered into by the Company by
mortgage or charge of all or any of the property of the Company and its uncalled Capital
for the Company being or in such manner as they may think fit;
j. To accept from any member, as far as may be permissible by law, a surrender of his
Shares or any part thereof, on such terms and conditions as shall be agreed;
k. To borrow or raise or secure the payment of money in such manner as the Company shall
think fit and in particular buy the issue of Debenture or Debenture stock, perpetual or
otherwise charged upon all or any of the Company‘s property (both present and future).
l. To open and deal with current account, overdraft accounts with any bank/banks for
carrying on any business of the Company.
m. To appoint any Person (whether incorporated or not) to accept and hold in trust for the
Company and property belonging to the Company, in which it is interested, or for any
other purposes; and execute such deeds and do all such things as may be required in
relation to any trust, and to provide for the remuneration of such trustee or trustees;
n. To institute, conduct, defend, compound, refer to arbitration or abandon any legal
proceedings by or against the Company or its officers, or otherwise concerning the
affairs of the Company, and also to compound and allow time for payment or satisfaction
of any debts due, and of any claim or demands by or against the Company.
o. To refer any claims or demands or differences by or against the Company or to enter into
any contract or agreement for reference to arbitration, and observe, enforce, perform,
compound or challenge such awards and to take proceedings for redressal of the same.;
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p. To act as trustees in composition of the Company‘s debtors and/or act on behalf of the
Company in all matters relating to bankrupts and insolvents;
q. To make and give receipts, releases and other discharges for moneys payable to the
Company and for the claims and demands of the Company.
r. Subject to the provisions of Sections 179 and 186 of the Act, to invest and deal with any
moneys of the Company not immediately required for the purpose thereof upon such
security (not being Shares of this Company), or without security and in such manner as
they think fit, and from time to time to vary the size of such investments. Save as
provided in Section 187 of the Act, all investments shall be made and held in the
Company‘s own name;
s. To execute in the name and on behalf of the Company in favour of any Director or other
person who may incur or be about to incur any personal liability whether as principal or
surety, for the benefit of the Company, such mortgages of the Company‘s property
(present or future) as they think fit, and any such mortgage may contain a power of sale
and such other powers, provisions, covenants and agreements as shall be agreed upon.
t. To determine from time to time who shall be entitled to sign, on the Company‘s behalf,
bills, notes, receipts, acceptances, endorsements, cheques, dividends, warrants, releases,
contracts and documents and to give the necessary authority for such purpose;
u. Subject to provisions of Applicable Law, to give a Director or any officer or any other
person whether employed or not by the Company, Share or Shares in the profits of the
Company, commission on the profits of any particular business or transaction; and to
charge such bonus or commission as part of the working expenses of the Company;
v. To provide for the welfare of Directors or ex-Directors or employees or ex-employees of
the Company and their wives, widows and families or the dependents or connections of
such persons by building or contributing to the building of houses, dwellings or by grants
of money, pension, gratuities, allowances, bonus or other payments, or by creating and
from time to time subscribing or contributing to provident and other associations,
institutions; funds or trusts and by providing or subscribing or contributing towards
places of instructions and recreation, hospitals and dispensaries, medical and other
attendance and other assistance as the Board shall think fit;
w. To subscribe or contribute or otherwise to assist or to guarantee money to charitable,
benevolent, religious, scientific, national or other institutions or objects which shall have
any moral or other claim to support or aid by the Company, either by reason of locality
of operation, or of public and general utility or otherwise;
x. Before recommending any Dividend, to set aside out of the profits of the Company such
sums as they may think proper for depreciation or to Depreciation Fund, or to an
Insurance Fund, or as a Reserve Fund, or Sinking fund, or any Special Fund to meet
contingencies or to repay Debentures or Debenture stock, or for special dividends or for
equalized dividends or for repairing, improving, extending and maintaining any of the
property of the Company or for such other purpose (including the purposes referred to in
the preceding clause), as the Board may, in their absolute discretion, think conducive to
the interest of the Company, and subject to Section 179 of the Act, to invest the several
sums so set aside or so much thereof as required to be invested upon such
investments(other than Shares of the Company) as they may think fit, and from time to
time to deal with and vary such investments and dispose of and apply and expand all or
any part thereof for the benefit of the Company, in such manner and for such purpose as
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the Board in their absolute discretion think conducive to the interest of the Company,
notwithstanding that the matters to which the Board apply or upon which they expend the
same, or any part thereof, may be matters to or upon which the capital moneys of the
Company might rightly be applied or expended; and to divide the reserve into such
special Funds as the Board may think fit, with full power to transfer the whole, or any
portion of a Reserve Fund or division of a Reserve Fund to another Reserve Fund or
division, of a Reserve Fund and with full power to employ the assets constituting all or
any of the above Funds, including the Depreciation Fund, in the business of the
Company or in the purchase or repayment of Debentures or Debenture stock, and without
being bound to keep the same, separate from the other assets ,and without being bound to
pay interest on the same with power, however, to the Board at their discretion to pay or
allow to the credit of such funds interest at such rate as the Board may think proper.
y. Subject to the provisions of the Act to appoint, and at their discretion remove or suspend
such general managers, managers, secretaries, assistants, supervisor, clerks, agents and
servants of permanent, temporary or special services as they may for time to time think
fit, and to determine their powers and duties and fix their salaries or emoluments or
remuneration, and to require security in such instances and to such amount as they may
think fit also from time to time provide for the management and transaction of the affairs
of the Company in any specified locality in India, or elsewhere in such manner as they
think fit; and the provisions contained in the four next following sub-clauses shall be
without prejudice to the general powers conferred by this sub-clause.
z. To comply with the requirements of any local law which in their opinion it shall, in the
interest of the Company, be necessary of expedient of comply with;
aa. Subject to applicable provisions of the Act and Applicable Law made thereunder, to
appoint purchasing and selling agents for purchase and sale of Company‘s requirement
and products respectively.
bb. From time to time and at any time to establish any committee for managing any of the
affairs of the Company in any specified locality in India or elsewhere and to appoint any
persons to the members of such committee and to fix their remuneration.
cc. Subject to Section 179 & 180 of the Act from time to time and at any time, delegate to
any person so appointed any of the powers, authorities and discretion for the time being
vested in the Board, and to authorise the Members for the time being of any such
committee, or any of them to fill up any vacancies therein and to act notwithstanding
vacancies, and any such appointment or delegation may be made on such terms and
subject to such conditions as the Board may think fit, and the Board may at any time
remove any person so appointed, and may annul or vary any such delegation.
dd. At any time and from time to time by power of attorney under the Seal of the Company,
to appoint any person or persons to be the Attorney or Attorneys of the Company, for
such purposes and with such powers, authorities and discretion (not exceeding those
vested in or exercisable by the Board under These Presents and subject to sections 179
and 180 of the Act) and for‘ such period and subject to such conditions as the Board may
from time to time think fit; and any such appointment may (if the Board thinks fit) be
made in favour of the members or any of the Members of any committee, established as
aforesaid or in favour of any Company, or the Shareholders, Directors, nominees or
managers of any Company or firm or otherwise in favour of any fluctuating body of
persons whether nominated directly by the Board and any such power of Attorney may
contain such powers for the protection or convenience of persons dealing with such
attorneys as the Board may think fit and may contain powers enabling any such delegates
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or attorneys as aforesaid to sub-delegate all or any of the powers, authorities and
discretions for the time being vested in them;
ee. Subject to Sections 184 and 188 of the Act, for or in relation to any of the matters
aforesaid or otherwise for the purposes of the Company to enter into all such contracts,
agreements and to execute and do all such acts, deeds and things in the name and on
behalf of the Company as they may consider expedient;
ff. Subject to the provisions of the Act, the Board may pay such remuneration to
Chairperson / Vice Chairperson of the Board upon such conditions as they may think fit.
gg. To take insurance of any or all properties of the Company and any or all the employees
and their dependants against any or all risks.
hh. To take insurance on behalf of its managing Director, whole-time Director, manager,
Chief Executive Officer, Chief Financial Officer or Company Secretary or any officer or
employee of the Company for indemnifying any of them against any liability in respect
of any negligence, default, misfeasance, breach of duty or breach of trust for which they
may be guilty in relation to the Company.
Establishment of vigil mechanism
261. Company shall establish a vigil mechanism for their Directors and employees to report their
genuine concerns or grievances. The audit committee shall oversee the vigil mechanism. The
vigil mechanism shall provide for adequate safeguards against victimisation of employees and
Directors who avail of the vigil mechanism and also provide for direct access to the
Chairperson of the audit committee, in exceptional cases. In case of repeated frivolous
complaints being filed by a Director or an employee, the audit committee may take suitable
action against the concerned Director or employee including reprimand.
MANAGING DIRECTOR
Board may appoint Managing Director(s)
262. Subject to the provisions of the Act and of these Articles, the Board shall have power to appoint
from time to time any of its member or members as Managing Director(s) of the Company for
fixed term not exceeding five years at a time and upon such terms and conditions as the Board
thinks fit and subject to the provisions of these Articles the Board may by resolution vest in
such Managing Director(s) such of the powers hereby vested in the Board generally as it thinks
fit, and such powers may be made exercisable for such period or periods and upon such
conditions and subject to such restrictions as it may determine. Additionally, the Managing
Director may from time to time authorise any employee of the Company by executing a power
of attorney or otherwise for such matters as he may deem fit in the best interests of the
Company.
263. Subject to the article above, the powers conferred on the Managing Director shall be exercised
for such objects and purpose and upon such terms and conditions and with such restrictions as
the Board may think fit and it may confer such powers either collateral with or to the exclusion
of and in substitution of all or any of the powers of the Board in that behalf and may from time
to time revoke, withdraw, alter or vary all or any of such powers. The Managing Director shall
not exercise any powers under Section 179 of Act except such powers which can be delegated
under the Act and specifically delegated by a resolution of the Board.
Restriction on Management
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264. The Board of Directors may, subject to Section 179 of the Act, entrust to and confer upon a
Managing or whole time Director any of the powers exercisable by them, upon such terms and
conditions and with such restrictions, as they may think fit and either collaterally with or to the
exclusion of their own powers and may, from time to time, revoke, withdraw or alter or vary all
or any of such powers.
Remuneration to Managing Directors/ whole time directors
265. A Managing or whole time director may be paid such remuneration, whether by way of
monthly payment, fee for each meeting or participation in profits, or by any or all these modes,
or any other mode not expressly prohibited by the Act, as the Board of Directors may
determine.
CHIEF EXECUTIVE OFFICER, MANAGER, COMPANY SECRETARY OR CHIEF
FINANCIAL OFFICER
266. Subject to the provisions of the Act and Applicable Law,—
a. A chief executive officer, manager, company secretary or chief financial officer may be
appointed at a Board Meeting for such term, at such remuneration and upon such
conditions as it may thinks fit; and any chief executive officer, manager, company
secretary or chief financial officer so appointed may be removed by means of a
resolution at a Board Meeting;
b. A Director may be appointed as chief executive officer, manager, company secretary
subject to provisions of Section 203 of the Act. The Board may also designate the head
of the financial function as the chief financial officer of the Company.
c. An individual may be appointed as the chairperson of the Company as well as the
Managing Director or chief executive officer of the Company at the same time on such
occasions as the Board may decide.
d. The functions of a company secretary shall be in accordance with Section 205 of the Act
and other Applicable Law.
e. Subject to the article above, the powers conferred on the chief executive officer shall be
exercised for such objects and purpose and upon such terms and conditions and with
such restrictions as the Board may think fit and it may confer such powers either
collateral with or to the exclusion of and in substitution of all or any of the powers of the
Board in that behalf and may from time to time revoke, withdraw, alter or vary all or any
of such powers.
f. The chief executive officer shall not exercise any powers under Section 179 of Act
except such powers which can be delegated under the Act and specifically delegated by a
resolution of the Board.
POWER TO AUTHENTICATE DOCUMENTS
267. Any Director or company secretary or any officer appointed by the Board for the purpose shall
have power to authenticate any document relating to the constitution of the Company and any
books, records, documents and accounts relating to the business of the Company and to certify
copies or extracts thereof.
268. Document purporting to be a copy of resolution of the Board or an extract from the minutes of
meeting of the Board which is certified as such in accordance with the provisions of the last
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preceding Article shall be conclusive evidence in favour of all persons dealing with the
Company upon the faith thereof that such resolution has been duly passed or, as the case may
be that extract is a true and accurate records of a duly constituted meeting of the Directors.
THE SEAL
269. The Board shall provide a Seal for the purposes of the Company, and shall have power from
time to time to destroy the same and substitute a new Seal in lieu thereof and the Seal shall
never be used except by the authority of the Board or a Committee of the Board previously
given. The Company shall also be at liberty to have an official Seal for use in any territory,
district or place outside India.
270. The Seal of the Company shall not be affixed to any instrument except by the authority of a
resolution of the Board or of a Committee of the Board authorised by it in that behalf, and
except in the presence of such Directors and the company secretary or such other person as the
Board may specify/appoint for the purpose; and the Director and the company secretary or
other person aforesaid shall sign every instrument to which the Seal of the Company is so
affixed in their presence. The Board shall provide for the safe custody of the Seal.
MANAGEMENT OUTSIDE INDIA AND OTHER MATTERS
271. Subject to the provisions of the Act the following shall have effect:
a. The Board may from time to time provide for the management of the affairs of the
Company outside India (or in any specified locality in India) in such manner as it shall
think fit and the provisions contained in the four next following paragraphs shall be
without prejudice to the general powers conferred by this paragraph.
b. Subject to the provisions of the Act, the Board may at any time establish any local
Directorate for managing any of the Delegation. affairs of the Company outside India, and
may appoint any person to be member of any such local Directorate or any manager or
agents and may fix their remuneration and, save as provided in the Act, the Board may at
any time delegate to any person so appointed any of the powers, authorities and discretions
for the time being vested in the Board and such appointment or delegation may be made on
such terms and subject to such conditions as the Board may think fit and the Board may at
any time remove any person so appointed and annual or vary any such delegations.
c. The Board may, at any time and from time to time by power of attorney under Seal,
appoint any person to be the attorney of the Company for such purposes and with such
powers, authorities and discretions not exceeding those which may be delegated by the
Board under the Act and for such period and subject to such conditions as the Board may,
from time to time, thinks fit, and such appointments may, if the Board thinks fit, be made
in favour of the members or any of members of any local directorate established as
aforesaid, or in favour of the Company or of the members, Directors, nominees or officers
of the Company or firm or in favour of any person whether nominated directly or indirectly
by the Board, and any such power of attorney may contain such provisions for the
protection or convenience of persons dealing with such attorneys as the Board thinks fit.
d. Any such delegate or Attorney as aforesaid may be authorized by the Board to sub-delegate
all or any of the powers, authorities and discretions for the time being vested in them.
e. The Company may exercise the power conferred by the Act with regard to having an
Official Seal for use abroad, and such powers shall be vested in the Board, and the
Company may cause to be kept in any state or country outside India, as may be permitted
by the Act, a Foreign Register of Member or Debenture holders residents in any such
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state or country and the Board may, from time to time make such regulations not being
inconsistent with the provisions of the Act, and the Board may, from time to time make
such provisions as it may think fit relating thereto and may comply with the requirements
of the local law and shall in any case comply with the provisions of the Act.
DIVIDENDS AND RESERVE
Division of profits
272. The profits of the Company, subject to any special rights as to dividends or authorized to be
created by these Articles, and subject to the provisions of these Articles shall be divisible
among the members in proportion to the amount of Capital paid-up on the shares held by them
respectively.
The Company in General Meeting may declare a Dividend
273. The Company in Annual General Meeting may declare Dividends to be paid to Members
according to their respective rights, but no Dividend shall exceed the amount recommended by
the Board; the Company in general meeting may, however declare a smaller Dividend. No
Dividend shall bear interest against the Company.
Dividend only to be paid out of profits
274. The Dividend can be declared and paid only out of the following profits;
a. Profits of the financial year, after providing depreciation as stated in Section 123(2) read
with Schedule II and Applicable Laws.
b. Accumulated profits of the earlier years, after providing for depreciation u/s 123(2) read
with Schedule II and Applicable Laws.
c. Out of money provided by Central or State Government for payment of Dividend in
pursuance of a guarantee given by the Government.
d. No dividend shall be declared or paid by the Company for any financial year except out
of the profits of the company for that year arrived at after providing for depreciation or
out of the profits of the Company for any previous financial year or years arrived at after
providing for depreciation in accordance with the provisions of the Act and remaining
undistributed, or out of both or out of such other money as may be permitted.
Transfer to reserve
275. The Board may, before recommending any Dividend, set aside out of the profits of the
Company such sums as it thinks fit as a reserve or reserves which shall, at the discretion of the
Board, be applicable for any purpose to which the profits of the Company may be properly
applied, including provision for meeting contingencies or for equalising dividends; and pending
such application, may, at the like discretion, either be employed in the business of the Company
or be invested in such investments (other than shares of the Company) as the Board may, from
time to time, thinks fit.
276. Such reserve, being free reserve, may also be used to declare dividends in the event the
Company has inadequate or absence of profits in any financial year, in accordance to Section
123 of the Act and Applicable Law made in that behalf. The Board may also carry forward any
profits which it may consider necessary not to divide, without setting them aside as a reserve.
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Interim Dividend
277. Subject to the provisions of Section 123 of the Act and Applicable Law, the Board may from
time to time pay to the Members such interim dividends as appear to it to be justified by the
profits of the Company.
Calls in advance not to carry rights to participate in profits
278. Where Capital is paid in advance of calls such Capital may carry interest but shall not in respect
thereof confer a right to Dividend or participate in profits.
Payment of pro rata Dividend
279. All dividends shall be apportioned and paid proportionately to the amounts paid or credited as
paid on the shares during any portion or portions of the period in respect of which the Dividend
is paid; but if any Share is issued on terms providing that it shall rank for Dividend as from a
particular date such Share shall rank for Dividend accordingly.
Deduction of money owed to the Company
280. The Board may deduct from any Dividend payable to any member all sums of money, if any,
presently payable by him to the Company on account of calls or otherwise in relation to the
shares of the Company.
Rights to Dividend where shares transferred
281. A transfer of Share shall not pass the right to any Dividend declared thereon before the
registration of the transfer.
Dividend to be kept in abeyance
282. The Board may retain the dividends payable in relation to such Shares in respect of which any
person is entitled to become a Member by virtue of transmission or transfer of Shares and in
accordance sub-Section (5) of Section 123 of the Act or Applicable Law. The Board may also
retain dividends on which Company has lien and may apply the same towards satisfaction of
debts, liabilities or engagements in respect of which lien exists.
Notice of Dividend
283. Notice of any Dividend that may have been declared shall be given to the persons entitled to
Share therein in the manner mentioned in the Act.
Manner of paying Dividend
284. Any Dividend, interest or other monies payable in cash in respect of shares may be paid by any
Electronic Mode to the shareholder entitled to the payment of the Dividend, or by way of
cheque or warrant sent through the post directed to the registered address of the holder or, in the
case of joint holders, to the registered address of that one of the joint holders who is first named
on the register of members, or to such person and to such address as the holder or joint holders
may in writing direct.
285. Every such cheque or warrant shall be made payable to the order of the person to whom it is
sent and the payment of every cheque or warrant sent under these Articles, shall, if such cheque
or warrant purports to be duly endorsed, be a good discharge to the Company in respect thereof.
The Company shall not be liable or responsible for any cheque or Warrant or pay-slip or receipt
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lost in transmission, or for any Dividend lost to the member of person entitled thereto by the
forged endorsement of any cheque or warrant or the forged signature of any pay-slip or receipt
or the fraudulent recovery of the Dividend by any other means.
Receipts for Dividends
286. Any one of two or more joint holders of a Share may give effective receipts for any dividends,
bonuses or other monies payable in respect of such Share.
Non-forfeiture of unclaimed Dividend
287. No unclaimed Dividend shall be forfeited by the Board unless the claim thereto becomes barred
by law and the Company shall comply with the provision of the Act and Applicable Law in
respect of all unclaimed or unpaid dividends.
ACCOUNTS
Directors to keep true accounts
288. The Company shall keep at the registered office or at such other place in India as the Board
thinks fit, proper books of account and other relevant books and papers and financial statement
for every financial year in accordance with Section 128 of the Act.
289. Where the Board decides to keep all or any of the Books of Account at any place in India other
than the registered office of the Company the Company shall within seven days of the decision
file with the Registrar a notice in writing giving, the full address of that other place.
290. The Company shall preserve in good order the books of account relating to the period of not
less than eight years preceding the current year together with the vouchers relevant to any entry
in such Books of Account.
291. Where the Company has a branch office, whether in or outside India, the Company shall be
deemed to have complied with the preceding Article if proper Books of Account relating to the
transactions effected at the branch office are kept at the branch office and proper summarized
returns made up to date at intervals of not more than three months are sent by the branch office
to the Company at its registered office or at any other place in India, at which the Company‘s
Books of Account are kept as aforesaid.
292. The books of account shall give a true and fair view of the state of affairs of the Company or
branch office, as the case may be, and explain its transactions effected both at the registered
office and its branches and such books shall be kept on accrual basis and according to the
double entry system of accounting. The Books of Account and other books and papers shall be
open to inspection by any Directors during business hours.
Preparation of revised financial statements or Boards’ Report
293. Subject to the provisions of Section 131 of the Act and the Applicable Law made thereunder,
the Board may require the preparation of revised financial statement of the Company or a
revised Boards‘ Report in respect of any of the three preceding financial years, if it appears to
them that (a) the financial statement of the Company or (b) the report of the Board do not
comply with the provisions of Section 129 or Section 134 of the Act.
Inspection of accounts
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No member (not being a Director) shall have any right of inspecting any books of accounts or
documents of the Company except as conferred by law or authorised by the Board or by the Company
in General Meeting.
AUDIT
Auditors to be appointed
294. Statutory Auditors and Cost Auditors, if any, shall be appointed and their rights and duties
regulated in accordance with Sections 139 to 148 of the Act and Applicable Laws. Where
applicable, a Secretarial Auditor shall be appointed by the Board and their rights and duties
regulated in accordance with Sections 204 of the Act and Applicable Laws.
295. Subject to the provisions of Section 139 of the Act and Applicable Laws made thereunder, the
Statutory Auditors of the Company shall be appointed for a period of five consecutive years,
subject to ratification by members at every annual general meeting. Provided that the Company
may, at a General Meeting, remove any such Auditor or all of such Auditors and appoint in his
or their place any other person or persons as may be recommended by the Board, in accordance
with Section 140 of the Act or Applicable Laws.
Remuneration of Auditors
296. The remuneration of the Auditors shall be fixed by the Company in Annual general meeting or
in such manner as the Company in general meeting may determine.
DOCUMENTS AND NOTICES
Service of documents and notice
297. A document or notice may be served or given by the Company on any member either
personally or sending it by post to him to his registered address or (if he has no registered
address in India) to the address, if any, in India supplied by him to the Company for serving
documents or notices on him or by way of any electronic transmission, as prescribed in Section
20 of the Act and Applicable Law made thereunder.
298. Where a document or notice is sent by post, services of the document or notice shall be deemed
to be effected by properly addressing, prepaying and posting a letter containing the document
or notice, provided that where a member has intimated to the Company in advance that
documents or notices should be sent to him under a certificate of posting or by registered post
with or without acknowledgment due and has deposited with the Company a sum sufficient to
defray the expenses of the doing so, service of the documents or notice shall not be deemed to
be effected unless it is sent in the manner intimated by the member and such service shall be
deemed to have been effected in the case of Notice of a meeting, at the expiration of forty-eight
hours after the letter containing the document or notice is posted and in any other case at the
time at which the letter would be delivered in the ordinary course of post.
Notice to whom served in case of joint shareholders
299. A document or notice may be served or given by the Company on or given to the joint-holders
of a Share by serving or giving the document or notice on or to the joint-holders named first in
the Register of Members in respect of the Share.
Notice to be served to representative
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300. A document or notice may be served or given by the Company on or to the persons entitled to a
Share in consequence of the death or insolvency of a member by sending it through post in a
prepaid letter addressed to him or them by name or by the title of representatives of the
deceased or assignee of the insolvent or by any like description, at the address if any) in India
supplied for the purpose by the persons claiming to be entitled, or (until such an address has
been so supplied) by serving the document or notice in any manner in which the same might
have been given if the death or insolvency had not occurred.
Service of notice of General Meetings
301. Documents or notices of every General Meeting shall be served or given in the same manner
hereinbefore on or to (a) every member of the Company, legal representative of any deceased
member or the assignee of an insolvent member, (b) every Director of the Company and (c) the
Auditor(s) for the time being of the Company.
Members bound by notice
302. Every person who, by operation of law, transfer or other means whatsoever, shall become
entitled to any Share, shall be bound by every document or notice in respect of such shares,
previously to his name and address being entered on the Register of Members, shall have been
duly served on or given to the person from whom he derives his title to such shares.
Documents or notice to be signed
303. Any document or notice to be served or given by the Company may be signed by a Director or
the company secretary or any person duly authorised by the Board of Directors for such
purpose.
Notice to be served by post or other electronic means
304. All documents or notices to be served or given by members on or to the Company or any office
thereof shall be served or given by sending it to the Company or officer at the office by post
under a certificate of posting or by registered post, or by leaving it at the office or by such other
electronic means as prescribed in Section 20 of the Act and the Applicable Law made
thereunder.
Admissibility of micro films, computer prints and documents to be treated as documents and
evidence
305. Any information in the form of a micro film of a document or image or a facsimile copy or any
statement in a document included in a printed material produced by a computer shall be deemed
to be a document and shall be admissible in any proceedings without further production of
original, provided the conditions referred in Section 397 are complied with.
306. All provisions of the Information Technology Act, 2000 relating to the electronic records,
including the manner and format in which the electronic records shall be filed, in so far as they
are consistent with the Act, shall apply to the records in electronic form under Section 398 of
the Act.
WINDING UP
307. Subject to the provisions of Chapter XX of the Act and Applicable Law made thereunder—
307.1 If the Company shall be wound up, the liquidator may, with the sanction of a Special
Resolution of the Company and any other sanction required by the Act, but subject to
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the rights attached to any preference share capital, divide among the contributories in
specie any part of the assets of the Company and may with the like sanction vest any
part of the assets of the Company in trustees upon such trusts for the benefit of the
contributories as the Liquidator, with the like sanction shall think fit.
307.2 For the purpose aforesaid, the liquidator may set such value as he deems fair upon any
property to be divided as aforesaid and may determine how such division shall be
carried out as between the members or different classes of members.
307.3 The liquidator may, with the like sanction, vest the whole or any part of such assets in
trustees upon such trusts for the benefit of the contributories if he considers necessary,
but so that no member shall be compelled to accept any shares or other securities
whereon there is any liability.
BONAFIDE EXERCISE OF MEMBERSHIP RIGHTS
308. Every Member and other Security holder will use rights of such Member/ security holder as
conferred by Applicable Law or these Articles bonafide, in best interest of the Company or for
protection of any of the proprietary interest of such Member/security holder, and not for
extraneous, vexatious or frivolous purposes. The Board shall have the right to take appropriate
measures, and in case of persistent abuse of powers, expulsion of such Member or other
Security holder, in case any Member/Security holder abusively makes use of any powers for
extraneous, vexatious or frivolous purposes.
INDEMNITY
309. For the purpose of this Article, the following expressions shall have the meanings respectively
assigned below:
a. “Claims” means all claims for fine, penalty, amount paid in a proceeding for
compounding or immunity proceeding, actions, prosecutions, and proceedings,
whether civil, criminal or regulatory;
b. “Indemnified Person” shall mean any Director, officer or employee of the
Company, as determined by the Board, who in bonafide pursuit of duties or functions
or of honest and reasonable discharge any functions as a Director, officer or
employees, has or suffers any Claims or Losses, or against whom any Claims or
Losses are claimed or threatened;
c. “Losses” means any losses, damages, cost and expense, penalties, liabilities,
compensation or other awards, or any settlement thereof, or the monetary equivalent
of a non-monetary suffering, arising in connection with any Claim;
310. Indemnification
a. Where Board determines that any Director, officer or employee of the Company should
be an Indemnified Person herein, the Company shall, to the fullest extent and without
prejudice to any other indemnity to which the Indemnified Person may otherwise be
entitled, protect, indemnify and hold the Indemnified Person harmless in respect of all
Claims and Losses, arising out of, or in connection with, the actual or purported exercise
of, or failure to exercise, any of the Indemnified Person‘s powers, duties or
responsibilities as a Director or officer of the Company or of any of its subsidiaries,
together with all reasonable costs and expenses (including legal and professional fees).
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b. The Company shall further indemnify the Indemnified Person and hold him harmless on
an ‗as incurred‘ basis against all legal and other costs, charges and expenses reasonably
incurred in defending Claims including, without limitation, Claims brought by, or at the
request of, the Company and any investigation into the affairs of the Company by any
judicial, governmental, regulatory or other body.
c. The indemnity herein shall be deemed not to provide for, or entitle the Indemnified
Person to, any indemnification against:
310.3.1 Any liability incurred by the Indemnified Person to the Company due to
breach of trust, breach of any statutory or contractual duty, fraud or personal
offence of the Indemnified Person;
310.3.2 Any liability arising due to any benefit wrongly availed by the Indemnified
Person;
310.3.3 Any liability on account of any wrongful information or misrepresentation
done by the Indemnified Person
310.3.4 The Indemnified Person shall continue to be indemnified under the terms of
the indemnities in this Deed notwithstanding that he may have ceased to be a
Director or officer of the Company or of any of its subsidiaries.
SECRECY
311. Every manager, Auditor, trustee, member of a committee, officer, servant, agent, accountant or
other person employed in the business of the Company shall, if so required by the Board of
Directors, before entering upon the duties, sign a declaration pledging himself to observe strict
secrecy respecting all bonafide transactions of the Company with its customers and the state of
accounts with individuals and in matters relating thereto and shall by such declaration pledge
himself not to reveal any of the matters which may come to his knowledge In the discharge of
his duties except when required to do so by the Directors or by any General Meeting or by the
law of the country and except so far as maybe necessary in order to comply with any of the
provisions in These Presents and the provisions of the Act.
312. Subject to the provisions of these Articles and the Act no member, or other person (not being a
Director) shall be entitled to enter the property of the Company or to inspect or to examine the
Company‘s premises or properties of the Company without the permission of the Directors or
to require discovery of or any information respecting any detail of the Company‘s trading or
any matter which is or may be in the nature of a trade secret, mystery of trade or secret process
or of any matter whatsoever which may relate to the conduct of the business of the Company
and which in the opinion of the Directors it will be expedient in the interest of the Company to
communicate.
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SECTION VIII – OTHER INFORMATION
XXV. DOCUMENTS FOR INSPECTION
The following contracts (not being contracts entered in the ordinary course of business carried on by
our Company or entered into more than two years before the date of the Information Memorandum)
which are or may be deemed material have been entered or to be entered into by our Company.
Copies of the following documents will be available for inspection at the Registered Office of our
Company on business hours with prior intimation, from the date of the Information Memorandum:
(a) Memorandum and Articles of Association of the Company along with Certificate of
Incorporation dated 12 August 2013 and Certificate of Commencement of Business dated 16
August 2013 issued by the RoC;
(b) Composite Scheme of Arrangement;
(c) Order of the Hon‘ble Gauhati High Court dated 31 October 2014 sanctioning the Composite
Scheme of Arrangement under Section 100 to 104 and Sections 391 to 394 of the Companies
Act between Greenply Industries Limited, Greenlam Industries Limited and their respective
shareholders and creditors;
(d) Letters issued by BSE and NSE, both dated 25 March 2014, according their no objection to
the Composite Scheme of Arrangement;
(e) Copy of Tripartite Agreement with National Securities Depository Ltd. dated 18 November
2014 and Central Depository Services (India) Ltd dated 5 November 2014;
(f) Memorandum of Understanding with the Registrar and Share Transfer Agent;
(g) Annual Report containing the Audited Accounts of the Company as of 31 March 2014 and
Audited Financial Statements for 30 September 2014;
(h) SEBI Letter dated 10 February 2015 bearing number CFD/DIL/BNS/SGS/OW/4361/2015
granting relaxation from the applicability of Rule 19(2)(b) of the Securities Contract
Regulation (Rules) 1957 for listing of Equity Shares of the Company;
(i) Consent from the Auditors for inclusion of their names as the statutory auditors and of their
reports on accounts in the form and context in which they appear in this Information
Memorandum;
(j) Statement of Possible Direct Tax Benefits dated 11 November 2014 from the Company‗s
statutory auditors;
(k) Board resolution dated 11 November 2014 for appointment of and payment of remuneration
to the Managing Director & CEO;
(l) BSE letter dated 18 February 2015 bearing number DCS/AMAL/FR/IP/299/2014-15 granting
in-principle approval for listing;
(m) NSE letter dated 15 January 2015 bearing number NSE/LIST/10900 granting in- principle
approval for listing.
Note: Any of the contracts or documents mentioned in the Information Memorandum may be
amended or modified at any time if so required in the interest of the Company or if required by the
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other parties, without reference to the shareholders subject to compliance with the provisions
contained in the Companies Act and other relevant statutes.
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XXVI. DECLARATION
All statements made in this Information Memorandum are true and correct.
On behalf of the Board of Directors of the Company
Sd/- Saurabh Mittal
Name: Saurabh Mittal
Designation: Managing Director and CEO
Place: New Delhi
Date: 23 February, 2015